VirtualizationWhat Is Data Center Virtualization? How It Works and Its Benefits

What Is Data Center Virtualization? How It Works and Its Benefits

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In simple terms, data center virtualization is the process of creating a virtual replica of a physical data center resource. This includes all hardware and software resources, such as a server, storage device, network, OS, apps and platforms.

As companies digitally transform, they seek to gain access to the latest technologies while reducing the costs of purchasing hardware and software and maintaining them. Data center virtualization technologies allow them to achieve these goals and also provide additional benefits.

How does data center virtualization work?

Data center virtualization systems are created using hypervisors. Hypervisors are a specialized type of software used to create and manage virtual machines (VMs). Top virtualization vendors like Citrix, VMware, IBM, Microsoft, Virtual Box, XenServer, and others offer hypervisors and allow clients to create VMs on the cloud, hybrid, or on-premises data centers.

Massive data centers, rich in computing resources, use VMs to better allocate and maximize resources. When built, VMs are assigned all components that a physical data center has, including memory, storage, and even operating systems.

VMs can be thought of as a virtual layer that exists on top of a real data server or machine, isolated from other VMs. Type 1 hypervisors, known as bare-metal hypervisors, run directly on the physical hardware, while type 2 hypervisors, known as hosted hypervisors, run on top of an operating system.

Using hypervisors and managing VMs, users can create one or multiple virtual data centers to better leverage resource utilization. Once the VM starts running, data center virtualization can be used to virtualize a variety of resources, including:

  • Servers
  • Storage
  • Networking
  • Security
  • Management

Benefits of data center virtualization

There are numerous benefits associated with virtualization technology, from cost savings and scalability to cybersecurity and sustainability.


Organizations can consolidate their infrastructure and avoid upfront costs of hardware and software licenses and maintenance costs. Additionally, through virtualization solutions that offer support, companies face less costs associated with their in-house IT teams.

Access to technology

From AI to machine learning to automated APIs, technology is evolving at a rapid pace. Companies can access the latest innovations using top virtualization services. If they were to develop these tools in-house the costs would be prohibitive.

Visualization and centralization

Data center virtualization breaks silos, centralizes data and infrastructure, and increases visualization. This in turn creates more agile and responsive systems and allows companies to make data-driven decisions, increase performance and identify risks.

Easy to scale up and down

When running in-house data centers, scaling up or down costs time, money and resources. But through virtualization, companies can scale up or down with just a couple of clicks. VMs can be easily created, moved, and resized.

Cybersecurity, compliance, privacy, and governance

VMs can be easily backed up and restored, which can help to reduce downtime in the event of a disaster. Additionally, virtualization can help to improve security by isolating VMs from each other and from the physical hardware. Compliance and governance can also be automated and better managed through these systems.


Running heavy workloads in data centers requires high computing processing power which automatically translates to increased costs in energy and higher carbon footprints. However, by managing and optimizing VMs, companies can gain insight into the power consumption and take actions to become more sustainable.

Challenges of data center virtualization

Despite its many benefits, data center virtualization is not a road void of challenges. Best practices, the right information, and the right tools can help companies overcome common roadblocks when migrating and running virtual data centers.

Talent gaps

Data center virtualization and the efficient management of VMs require skilled IT workers who have the knowledge to properly set up and configure these systems. With technical talent gaps affecting the industry, companies that are new to virtualization may find this challenge to be the hardest to overcome.


As mentioned, VMs, networks, and other components of virtual data centers require proper configuration and constant monitoring. When a virtualized system is not properly implemented, performance will immediately be affected. Furthermore, the risks go beyond downtime or an infrastructure not working at 100%, and move into privacy and cybersecurity risks.


Understanding virtualization cybersecurity can also be challenging as cybercriminals level up their attacks and become more creative every day, finding new ways to breach a company’s digital surface. If all business-critical operations of a company are virtualized, cybersecurity efforts need to be robust. Responding to modern cybercrime is a challenge even for the most tech-savvy companies.


Managing a virtualized data center can be more complex than managing a traditional data center. This is because there are more components to manage, such as the hypervisor, VMs, and storage.

Data center virtualization best practices

Companies should not try to virtualize their entire data center overnight. They can think big but take small wins. Starting by virtualizing a few servers will help them build confidence and learn. Later they can scale up knowing they have identified the key problems.

Knowing which technology to use is also vital. The virtualization market is rich and fortunately, respected and excellent names in the industry offer virtualization services. However, each company is different. Businesses should do their research, know what they need and make sure that the technology partner they choose offers the features they need at the value they can afford.

Any company that is thinking about data center virtualization must also think about having a solid IT team. While a lot of virtualization tools and services can be outsourced, in-house IT talent teams are essential to keep track of everything and make sure that operations run as they should.

Bottom line: The future of data center virtualization

The benefits of virtualization far outweigh the risks and challenges, especially if companies adopt best practices, build a culture of innovation and have robust and clear strategies and plans. Data center virtualization is becoming the norm in the industry and modernizing is the way forward to drive business and organizational outcomes.

Get started virtualizing your data center with some of the best server virtualization software, hand-picked by our experts.

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