Cloud computing: Just a fancy name for virtualization?

Two of the hottest terms in computing these days are virtualization and cloud computing. Are these two terms the same? Are they mutually exclusive? Does one depend on the other? This article will demystify the terms and help the reader understand how each technology fits today’s organizations.

What is Cloud Computing?

The term “Cloud Computing” comes from the symbol usually used to depict the Internet on network diagrams. That term leads one to believe that some portion of their computing environment “lives” on the Internet (and that assumption would be true). This type of computing environment is quite a departure from most computing environments today where all computing resources are owned and/or operated within an organization’s LAN/WAN infrastructure.

So, Cloud Computing is some type of service. Cloud Computing can be a service for a single piece of software (like Google Docs), a single component for software (like Microsoft SQL Data Services), Virtual Servers (like Amazon EC2), etc. The main advantage to Cloud Computing is the service provider takes care of all the capital expenditure (CapEx) and a percentage of the operational expenditure (OpEx) depending on the type of service. For example, Google Docs takes care of 100% CapEx and 100% OpEx, whereas Amazon EC2 takes care of 100% CapEx but maybe 25% OpEx.

What is Virtualization?

Virtualization is another hot topic today. A lot of people think virtualization means server virtualization, but the truth is that virtualization is a very broad topic. There are many types of virtualization including server virtualization, application virtualization, desktop virtualization, operating system virtualization, presentation virtualization, etc. But, for the purposes of this article, we will focus on server virtualization.

A virtual server is basically the same as a physical server based on outward appearances. Virtual servers perform the same functions as physical servers. In fact, it is nearly impossible to distinguish a physical server from a virtual server when logged on to the server console (unless you start to go look at drivers).

The key difference between physical servers and virtual servers is that virtual servers are not installed on the physical hardware (they are hardware agnostic). Virtual servers are installed on something called a hypervisor. This hypervisor allows you to run many virtual servers on a single piece of physical hardware (there are a lot of other benefits to server virtualization, but for the purposes of this article we will focus on hardware independence and consolidation).

So, Cloud Computing doesn’t need virtualization then – right? Well, technically, Cloud Computing doesn’t require virtualization. But, in order for Cloud Computing to be a practical service offering, you need the economies of scale and automation capabilities of virtualization. Otherwise, the cloud service provider would need to manually provision services per client with dedicated hardware.

Nicholas Carr draws a nice analogy in his book titled Does IT Matter? Up until the last decade of the nineteenth century, most manufacturers relied on water or steam power to operate their machinery. These power systems were large, complex, and expensive. Around the turn of the century, construction of central power stations in cities brought the operating benefits of electric power to small manufacturers. These small manufacturers couldn’t afford to build their own infrastructure, but they could afford to purchase power in small quantities from a utility. Eventually, all manufacturers converted to using power from utility companies. Electric power is now a commodity instead of a competitive advantage.

Look for these topics in future articles on the Xcentric Blog: * Types of Cloud Services (*aaS)
* Types of Virtualization
* Offline Computing in an Online World
* Virtualization and Service Oriented Architecture

Jason Conger is the Hosted Services Architect at Xcentric, which specializes in IT solutions and certified networks for CPA firms. Jason is a member of the Citrix Technology Professional Program, which recognizes individuals for their outstanding contributions to Citrix solutions, and offers 12 years of experience in the technology delivery. Prior to joining Xcentric, Jason worked at Citrix as a Presentation Server Architect and has designed and built both large and small Citrix environments. Jason has published numerous articles, developed software used by Fortune 500 companies, and has spoken at technology events around the world. He also maintains a website at Jason can be reached at 678.297.0066 or

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