Does nova-compute perform virtualization

Well, nova-compute basically is a daemon that does the job of creating and terminating virtual machines. It does this job through virtual machine API calls. There is something called as a libvirt library. Libvirt is nothing but an API for interacting with Linux virtualization technologies(its a free and open source software that needs to be installed with nova as a dependency).

Basically libvirt gives nova-compute, the functionality to send API requests to KVM, Xen, LXC, OpenVZ, Virtualbox, Vmware, Parallels hypervisors.

So when a user in openstack requests to launch a cloud instance, what actually happens is nova-compute sending requests to hypervisors using libvirt. Well other than libvirt, nova-compute can send requests directly to Xen-Api, vSphere API etc. This wide support of different virtualization technologies is the main strength of nova.