Comparing Cloud Computing Versus Virtualization

CloudHealth Tech Staff
Published:
Jun. 29, 2020
4 minute read

Our comparison of cloud computing versus virtualization illustrates the differences between the two so that businesses looking to modernize or expand on-premises data centers can make an informed decision about which option is best for them.

If a business wants to modernize or expand its on-premises data center, it has multiple options. It can buy new hardware and store it in-house or in a colocation data center. It can rent hardware from a colocation center (data center outsourcing), virtualize its existing data center, or migrate some or all of its operations to the public cloud.

The concepts of buying and renting hardware are simple to understand and distinguish between. However, because virtualization is a key element of cloud computing, the two terms can sometimes be confused. Consequently, we have compiled this comparison of cloud computing versus virtualization to explain the differences between the two.

What is virtualization?

Virtualization is a technology that allows businesses to create multiple simulated environments or dedicated resources from a single, physical hardware system. In a virtualized environment, software called a hypervisor sits on top of the physical hardware system and abstracts the system’s resources. Most often virtualization is used to run multiple operating systems on the same server (virtual machines), but it can also be used to create separated storage devices or network resources.

The advantage of virtualization for a business looking to modernize or expand its on-premises data center is that, rather than maintaining multiple servers that each have a different function, a single server can be used for multiple purposes. This reduces server wastage due to underutilization and eliminates the need to buy or rent more hardware. It is also an ideal option for businesses with concerns about storing sensitive data in a public cloud.

What is cloud computing?

With cloud computing, businesses pay for using a cloud service provider’s IT resources. The resources (i.e. compute power, storage, databases, etc.) are hosted in a remote data center and delivered on-demand over the Internet. There is no hardware to buy or maintain, and no software to install or update. Businesses only pay for the services they provision—either on a pay-as-you-go system or by committing to a certain amount of spend/utilization over a period of time in order to get a discount.

The advantage of cloud computing for a business looking to modernize or expand its on-premises data center is there are no capital investments required nor hardware maintenance overheads. Cloud-based infrastructures are more scalable and flexible than their on-premises equivalents, and businesses get access to the latest technologies with the click of a mouse. It is generally accepted that you can do more for less in the cloud provided you practice effective cloud governance.

Cloud computing versus virtualization: why confusion exists

The reason confusion sometimes exists between the terms cloud computing and virtualization is that cloud service providers virtualize most of their data centers in order to maximize the utilization of their servers. Virtualization isn’t the only technology used in a cloud service provider’s data center, but it is the primary technology that makes cloud computing possible.
What most distinguishes a business’s virtualized on-premises IT environment from a public cloud is that, in a public cloud, virtualized resources are placed into a centralized pool that can be accessed on demand by different businesses. There are some technicalities relating to whether a virtualized environment can be called a cloud or not (i.e. there has to be a self-service component), but generally the only factors a business should consider when contemplating cloud computing versus virtualization are cost, security, scalability, and management.