Why does any of this use VMs? Not familiar with the space at all

Uh? IT for higher ed is not that different from any other enterprise IT.

I used to work at a university, although I worked on the Linux/HPC side of things we did have regular contact with the IT department. So things the IT department used VM's for of the top of my head:

- Web servers. Yes, the official university web pages, with fronted servers, database servers and whatnot. But also a lot of departments had their own servers, even some research groups ran their own. To get rid of the zillions of ad-hoc servers running in closets here and there IT gave out VM's pretty freely to staff members.

- Email. Yes, this was before everyone + dog outsourced their email, so they ran their own in-house email servers.

- print servers

- (I think file servers were mostly non-VM appliances, my university used netapp's a lot)

- All kinds of management systems to manage the campus workstations and network. And things like Active Directory and other directory services type services which are critical.

- A zillion in-house applications for things like signing up for courses and other things necessary for handling thousands of students.

- A lot of bespoke systems given out to research groups for whatever purposes they needed, again in order to get rid of the zillion repurposed old pc's running in closets acting as servers or running some experiments etc.

- Critical services and some not-so-critical services as well had test environments to test changes before rolling out to production.

- Finance/admin stuff like payroll etc.

- Shell servers (ssh), RDP servers, VPN servers etc. to enable staff to access university services from outside.

All in all, it was hundreds and hundreds of VM's. Wouldn't surprise me if there were actually thousands.

None of it needs to be on VMs, but it's generally more convenient to manage when it is. You could also use something like Kubernetes, but then you're administering Kubernetes.