Virtualization is the latest emerging technology that is driving today’s information technology systems. This technology has been developed to provide IT solutions without relying on the usual hardware requirements. For example, one computer can run multiple instances of Windows to a large number of terminals, so instead of needing five computer systems to run five workstations, only one computer and five monitors and keyboards are needed.

Cloud computing is a powerful application of the virtualization paradigm. At its core, cloud computing is focused on providing IT infrastructure without the required hardware implementation by hosting services through an internet portal. A technology firm can maintain one large computing system and then lease out its use to clients. The end users are able to utilize IT systems without having to install the hardware, develop software applications, and maintain additional staff. The system works just like a utility provider; services are offered on a subscription or a per-use plan.

Let’s explore how virtualization and cloud computing have changed the world of IT and opened new opportunities for business.

The most straightforward application of virtualized resources is desktop virtualization. As stated above, an operating system is run on a central server. Access terminals, which are usually just a monitor with a keyboard and a mouse, send requests to the server to run programs or applications. The results are then transmitted back to the access terminal.

Virtualization can also be applied in the opposite direction. A single computer or server can run multiple devices. In an industrial setting, one processor can control the operation of many pieces of equipment. Remote desktop connection services are in the same category, allowing an external computer to access and run another computer just as if it were physically connected.

These systems run just like typical computers, however, the actual amount of processors needed is drastically reduced; there is no need for a computer in every office or attached to every machine. It is an excellent way to reduce business costs through the elimination of excess computing power. This is a common trend in cloud computing that we will explore, utilizing computer resources dynamically to

Cloud computing has a heavy emphasis on virtual applications, also referred to as software as a service. Programs and applications are run from a central server and distributed on a subscription, per-use, or license basis. There are a number of applications for this service ranging from simple programs to entire business units.

On the basic level, suites like Google Apps provide common functions such as email accounts, calendars and planners, word processing, spreadsheets, and web page creators. All of these applications are hosted by Google and are provided to users without actually installing any for the software onto the user’s computer. Spam filtering, anti-virus protections, and payroll and time tracking applications can be easily and quickly added to a company’s technology system.

Business uses for cloud computing are more robust. For example, companies can expand their ability to reach customers by offering products in an online storefront. The entire application suite can be run through a cloud computing provider, completely eliminating the need for an in-house server and programs. The entire online commerce process can be virtualized including product advertisement, shopping carts, billing, shipment tracking, and customer accounts. By accessing the applications through an internet portal, many small and medium businesses can get their products and services online with an absolute minimum of capital expense and lead time. Other examples include databases and data center services.

Large companies can also benefit from cloud computing applications. Enterprise resource planning (ERP) and customer relationship management (CRM) solutions can be virtualized and scaled to the appropriate size. ERP systems manage all of the functions, resources, and information of a business in a holistic manner through shared data sources. In a nutshell, an ERP suite can be accessed to manage all the available resources of a company, and then have that information available to every department, greatly improving transparency and dynamic decision making. CRM systems manage customer relations, from handling service requests, parsing emails and phone calls, and building client profiles for targeted services. All of these implementations are turn-key with cloud computing and are powerful tools to drive profitability.

At this point, the largest benefit of cloud computing can be seen as a greater accessibility to computing resources via a substantially reduced capital cost. Most technology implementations require large capital investments and lead times. There is a significant lead time to build hardware, install applications, optimize programs and applications, and train end users. The capital outlay and lead times create a barrier to entry and a level of risk that many companies cannot accept.

In addition to the capital savings inherent in cloud computing systems, the operational costs can also be much lower than an in-house system. Many companies cannot possibly compete with the economy of scale that large corporations enjoy. Specialized IT firms can offer efficient and scalable solutions to meet design requirements without over spending. The resources employed are also shared among many users on a 24 hours a day basis, whereas most businesses would only be running a system during the workday. These efficiencies are typically only enjoyed by large tech companies such as Amazon or IBM, but now they are accessible by any size business.

Technology is constantly undergoing innovation and upgrading. Just as there is risk and capital investment required during startup, they are also present when a system requires upgrades or new technology becomes available that can improve a company’s profitability. The opportunity cost of utilizing one technology versus the newest version can add up over time, until the current system has experienced obsolescence. However, IT firms are better equipped to integrate updates and upgrades into offered services. The latest applications and infrastructure are incorporated into the “cloud,” so to speak, relieving companies from the constant need to chase technology innovation.

Utilizing remote servers and data storage is the optimal method for proper data reliability. A single server can be irreparably damaged due to natural disasters, fire, theft, or vandalism. Utilizing virtualization services in order to decentralize IT systems makes available a necessary layer of protective redundancy. For business plans that rely on data security and availability, data backup is a life saver.

Even the most secure and reliable data systems will experience failures. Having a duplicate system in place is the fastest way to keep a business running while repairs and recovery are conducted. A full virtual replication or colocation system is much more effective than periodic data backups. Live servers can transform data recovery into an instantaneous operation with little to no data loss. Compare that to a traditional backup system that requires a rollback and a long physical process of loading systems from disks.

The great thing about the “cloud,” is that IT infrastructure can be instantly and dynamically added to an existing operation. If a server is being overloaded with requests for a popular website, extra server power is seamlessly added. When the demand is gone, the extra capabilities are turned off. Databases can be easily expanded to accommodate growing operations. Cloud computing is a potent supplement to meet any computing resource needs without waste or overages.

Established IT departments within companies have also seen changes due to cloud computing. The overall services offered are not limited to start-ups and service expansions. Managed IT services range from virtual server hosting, to IT infrastructure management, and managed security services. Businesses waste approximately 60% of their typical system administration time on recurring, low value but critical functions like data storage management and patch management. Eliminating this waste with administrative expertise, managed services, and enterprise hosting services allow IT resources to be used for high-value activities.

Just like any resource, IT hardware works most efficiently with the proper management. Intelligent allocation of resources will allow systems to provide better services without having to install additional hardware. Rearranging server architecture can better distribute loads to eliminate slowdowns and crashes. Storage assessments can be leveraged to create solutions for long term data retrieval, data encryption, and scaling data centers to handle growth.

Security issues in the data and IT fields have come to the forefront of the global economy. Sensitive data is being stored, manipulated, and transmitted on a daily basis. Securing mission critical data is a concern for government agencies, retailers, corporations, small businesses, and intellectual property. Cloud computing is also dedicated to keeping data centers safe from failure, theft, and vandalism. There is no longer a need for dedicated IT security personnel with managed security services. Up to date methods and procedures for securing data are available for any application.

Overall, virtualization and cloud computing are employed to break down the traditional barriers that have made many IT implementations prohibitive for all but the largest companies. From desktop virtualization to data center replication, the opportunities are endless.