Virtualization is a big part of what makes the cloud what it is. First let’s explain a little about how virtualization works.
The old thinking told us that one box did one thing. You could touch it and label it with a sticky so you could find it in your sea of servers and switches. That is all fine and dandy but very wasteful and difficult to manage.
The new technologies are allowing us to pull multiple servers and tasks into a single box. Think about using a school bus for just 5 or so students. That would be entirely wasteful on gas and materials etc. Virtualization technology takes that bus capacity and allows you to maximize its use. We can allocate resources and give each server a few seats on the bus or a lot of seats based on their need. By doing this companies can see significant reductions in hardware costs, electric costs (including cooling), and support cost. So it’s green and budget friendly at the same time. Seems like a no-brainer.
Virtualization can also be used to pull old hardware into new hardware. A lot of times this is valuable to do when your server runs fine except that the hardware is older and maybe out of warranty or nearing the end of its life. On top of that you can usually add more resources and functions into the new virtual setup to make your business run better.
All in all it’s a very wonderful thing and a model most small to medium business need to be moving toward.