Cloud computing and virtualization are two main terms that people encounter when looking to optimize and modernize IT infrastructure of their organization. Both terms are often used in conjunction with one another and sometimes, erroneously, even interchangeably. In reality both virtualization and cloud computing are two very different concepts each with their own set of advantages and drawbacks, designed to tackle different challenges, although one is often used as a part of the other.

Written by:
Vitaly Plitchenko,
Market Research Specialist

However, numerous case studies show that both of these solutions can be used to streamline IT in a cots-beneficial way. With this target in mind, decision to choose between cloud computing vs virtualization depends on the broader vision of the company’s desired IT infrastructure and other various factors, such as budged and willingness to hire additional specialists. To better realize what constitutes this decision let’s find out where difference between cloud and virtualization exactly lie.

What is virtualization technology

Virtualization was first developed as a means to divide computing resources between several applications. Eventually this technology grew to fully abstract software and hardware layers, making them independent from one another. Now almost every aspect of software and physical infrastructure can be abstracted and virtualized. Depending on the task, following types of virtualization can be distinguished:

  • Virtual machines. Virtual environment that includes fully functional operating system. From user standpoint, it can appear indistinguishable from software installed on an actual hardware. Virtual desktops and servers are prominent examples of this.
  • Virtual resources. This technology is used to either divide a single physical resource into several virtual ones or, on the contrary, pool several physical resources into a single virtual one. Memory and storage are the common targets of this.
  • Virtual applications. Virtualization is executed on operating system level via the use of software containers, resulting in a stand-alone software and databases that do not require installation and can run immediately.

Each of these types has a wide range of uses. While virtual resources and virtual applications are often used as a part of a solution, virtual machines are used on their own to deliver controllable working environments and efficient advanced client/server architecture.

Each type of virtualization is achieved with their own technology. To create and run virtual machines, hypervisor solutions are used. Hypervisors, that can work either from within the operating system or on a clean hardware, are used to run several isolated virtual systems often with fully simulated hardware on a single physical machine. This allows, for example, to place several virtual servers on a single physical one, allowing users to use virtualization to make their infrastructure more efficient.

Advantages of virtualization approach

Usefulness of virtual machines to an organization derives from their three inherent properties:

  • Hardware independence. With full virtualization, virtual software operates on a virtual hardware specified by the user, while being fully separate from an actual physical hardware of the host.
  • Isolation. Operating system of a virtual machine is fully isolated from the OS of the host machine. Any changes made to the virtual OS will not reflect on the host OS.
  • Encapsulation. Virtual machine is fully encapsulated in a single file that is easy to manage, backup, or move if needed.

This allows virtualization to solve a number of key problems for an organization, the biggest of which are:

  • Underutilization of resources. Computing power of modern servers are rarely utilized to its full extend. Virtualization allows to place several virtual servers on a single physical one, allowing for an effective server consolidation and full utilization of computing power.
  • High costs and inflexibility of physical infrastructure. Virtualization allows to save hardware resources and provides flexible easy-to-manage solution that can be quickly provisioned as needed, allowing for cost-effectiveness and flexible dynamic infrastructure.
  • Legacy software usage. Virtualization allows to keep running unsupported legacy software on a modern hardware, while often even providing performance benefits.
  • Uptime maximization. Virtual machines can be deployed much faster than the physical servers, making them a great tool to maximize uptime.
  • Redundancy. Several copies of virtual machine can be deployed on a separate hardware to provide redundancy and ensure high availability.

Apart from creating cost-effective IT infrastructure, virtualization can be useful in a number of ways. It is invaluable in testing and development, can be used for product demonstrations, or training. It can be very handy in disaster recovery, allowing to deploy backups and additional resources in minutes. Virtualization can also be used to create fully controllable environments for users to work in.

What is cloud computing

Just as virtualization, cloud computing rose to prominence in the past decade and was quickly adopted by a large number of organizations as part of a strategy to cut costs on maintaining and managing their own IT infrastructure. The term itself is a widely used and amassed a broad range of meaning. At its core, the term itself can be defined as a network-based service delivering computing resources on demand. More specific definition is created by National Institute of Standards and Technology (NIST), that distinguishes several essential characteristics that such services should possess:

  • On-demand service. Consumers can provision additional resources as needed by themselves via an automated system. Such system should not require interaction with human administrator.
  • Broad network access. Resources should be readily and fully available via network, allowing users to access them from a wide range of clients.
  • Resource pooling. Provider resources are pooled together and dynamically assigned based on a consumer demand. They should feel independent from a hardware or a physical location.
  • Rapid elasticity. Resources should be able to appropriately scale according to user demand. From consumer point of view, resources should feel unlimited with the ability to quickly provision more at any time.
  • Measured service. Number of used resources should be monitored and controlled, and users are usually charged as they go, proportionally to the amount of resources they are using.

Cloud computing is delivered via a number of service models, each designed to answer different needs. And while some specialist go for a more granular classification (Distinguishing storage as a service, database as a service, etc.) these three service models are an industry accepted standard:

  • Infrastructure as a service (IaaS) – offers computing resources, such as processing power, memory, storage or data center space. Users need to install their own applications in order to use provided resources.
  • Platform as a service (PaaS) – provides fully featured development environments to create applications. Such service often includes OS, programming environment, server, and database.
  • Software as a service (SaaS) – provides access to applications on demand.

Check out our article on SaaS, PaaS and IaaS to learn more about these types of services.

These services can be deployed in a number of ways:

  • Public cloud - services offered via public networks. Data centers and infrastructure for this type of services are usually maintained by providers themselves. Security concerns are the biggest drawback preventing companies from adopting this type of cloud service.
  • Private cloud - services, operated within a single organization. They are usually run and maintained by an organization and delivered via secure inner network for internal needs.
  • Community cloud - shared services created by several organizations in close proximity to address common challenges and concerns.
  • Hybrid cloud - two or more distinct deployment methods are used to create a specialized unified cloud service to answer particular needs of an organization.

Private and hybrid cloud are the first choice for most organizations from the security standpoint, while public cloud proves to be more cost-effective.

Cloud computing can be used to replace IT infrastructure fully or in parts with an automatic scalable on-demand service that will be able to cover all computing needs of the company without the necessity for them to maintain their own stuff and buy their own hardware. This makes it more cost-effective and rises the efficiency of the business, allowing company to focus on their core offer.

Challenges of cloud computing

While benefits and advantages of adopting the cloud are obvious, a number of issues and challenges also exists, making life harder for both providers and clients:

  • Costs. Low cost is one of the main advantages to cloud computing, but it becomes very hard to maintain as user pulls more and more resources. Keeping cloud computing cost effective for large companies is the challenge every service provider faces right now.
  • Privacy. Privacy concerns are a prominent issue when it comes to cloud computing. Cloud computing is heavily monitored with every user action known to provider. Provider often handles personal user information that can easily be misused.
  • Availability. If cloud service becomes unavailable, users will be cut off from important data and computing resources. In terms of company, this can result in a loss of business. Therefore, ensuring high availability is a top priority for any cloud provider.
  • Performance. Lack of resources, bugs, or infrastructure flaws can result in poor performance that will negatively impact user experience.
  • Reliability. Poor reliability, such as synchronization issues, can severely disturb user experience and lead to  loss of important data. Providers need to make sure that their services are working properly as intended.
  • Security. At the moment, security risks of cloud computing are probably the biggest concern stopping companies from fully adopting these services. A large number of user data travels through the network without proper protection or encryption, creating demand for appropriate security solutions.

All this risks and unsolved challenges are the main driving force keeping companies from fully committing to cloud services. In many ways, choice between virtualization and cloud solution for a company is defined by how concerned they are about privacy, security, performance and costs.

Difference between cloud computing and virtualization

By understanding the nature of these two concepts, key underlying difference between virtualization and cloud computing becomes apparent. While virtualization is designed with scalability, flexibility, and hardware independence in mind, same things that can be said about cloud services, there is a number of characteristics that it does not possess:

  • Not elastic – deployment or retraction of virtual machines is limited by capabilities of the hardware. You cannot add additional resources beyond hardware limitations and there is a lower limit of spending based on the necessity to maintain certain minimum amount of hardware at all times regardless your workload.
  • Not automatic – provision of resources cannot be automatically done by the user as needed. Additional specialists are required to deploy, maintain, and retract virtual machines.
  • Part of an infrastructure – ultimately, despite the presence of certain level of abstraction, virtual machines are still part of an IT infrastructure of an organization. They require maintaining hardware and staff, and they themselves require a level of maintenance similar to that of physical systems.
  • Made for IT – virtualization is a technology create for qualified IT personal more so than for the end-user. It is designed to optimize infrastructure and make it more efficient and cost-effective.

Cloud computing uses server virtualization as an underlying part of the service, helping providers to pool and deliver resources. However, while being very prominently used as a part of cloud services, virtualization is not inherently necessary for a cloud to exist and not identical to it. Rather, modern cloud services built on top of a virtualization foundation to deliver automation and scalability.

Cloud services are created with end user in mind. Instead of being a part of an IT infrastructure of the company, they replace it with an automatic on-demand service that does not require any management or specific knowledge from an organization using it.

This is what makes could service a completely different experience both from the standpoint of companies using and running the service. This key differences are also what makes two concepts distinct for a developers deciding to enter the market with their own solution.

Here’s a concise summary of our comparison of virtualization vs cloud computing in the form of a table:



Cloud computing


Technology, that allows to fully separate software from underlying hardware

Delivery method for providing data and computing resources over the network on demand

Core Attributes

  • Hardware independence
  • Isolation
  • Encapsulation
  • On-demand service
  • Broad network access
  • Resource pooling
  • Rapid elasticity
  • Measured service

Use cases

  • Virtual machines
  • Virtual resources
  • Virtual applications
  • Software as a Service
  • Platform as a Service
  • Infrastructure as a Service


  • Cost-efficient utilization of existing infrastructure
  • Redundancy and uptime maximization
  • Allows for legacy software usage


  • Cost saving compared to maintaining physical infrastructure or on-premise solutions
  • Availability and ease of use
  • Performance and stability
  • All updates and patches are applied automatically by the vendor


  • Not elastic, resources cannot be instantly added on demand
  • Resources are not automatically provisioned
  • Part of an infrastructure that needs to be maintained
  • Made for IT, not easy to use
  • Privacy considerations – your data in the hands of another company
  • Security considerations – security of your data depends on another company
  • Availability considerations – cloud computing depends on internet access, virtualization can work without it
  • Potentially high costs – in some cases, cloud computing can be more expensive than virtualization


  • Used to enable cloud computing
  • Allows to optimize existing on-site resources, run legacy software, create controlled environments
  • Used to save costs on computing resources and infrastructure
  • Convenient subscription-based model, where vendor handles all the issues and client just uses service as needed

Cloud computing and virtualization development

With the current drive for cost-effectiveness, solutions allowing organizations to spend less on IT infrastructure are usually met with high demand. Both virtualization and cloud markets are on the rise with demand outpacing the proposition. However, there are certain challenges to developing these types of solutions. The biggest of which is the difficulty in finding qualified professional developers with the right expertise. Virtualization by itself is hard enough, and when building a cloud service on top of it, challenges, such as virtualization security in cloud computing tend to arise, requiring very specific knowledge and experience from your team.

Increased time-to-market can also be a problem due to large scopes that these projects tend to have. One way to solve the problem is to use an outsourcing company that provides research and development services specializing in cloud computing and virtualization, such as Apriorit.

Apriorit developers worked on a number of large and complex projects involving virtualization and cloud technology, amassing unique knowledge and experience in the process. Deep understanding of virtualization, cloud computing, security, networks and system management combines into unique expertise allowing our developers to effectively create solutions in cloud and virtualization domains.


Not too long ago virtualization and cloud computing where considered to be the future of IT infrastructure, today they became the present. However, while the adoption rates are high, not every company is on board and not every challenge is solved. Market is developed enough, but still looking for new solutions and valuable ideas, making it an ideal time for you to contribute.

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