Virtualization vs Cloud: The Best Solution for Your Business

Closely associated with one another, virtualization and cloud computing are often mentioned in the same breath. In a nutshell, virtualization is a technology that uses software to create virtual versions of a machine’s software and hardware components. Clouds are IT environments that utilize virtualization and then make those software and hardware components accessible on-demand. There’s more to it than just that, so in this virtualization vs. cloud article, we demystify the tech behind the jargon to give you a clearer picture.

Definition of Virtualization

Virtualization is a technology that abstracts certain hardware-based resources (e.g., CPU, RAM, storage, network) and presents them as software. The most common application of virtualization—and the one we’ll be talking about most of the time in this article—is server virtualization, which allows you to run multiple virtual instances of servers on one or more physical server(s).

From the point of view of the user, the virtualized computing resources, presented as software, behave exactly like their physical counterparts. They operate in isolation so that you can have multiple simulated environments, often called virtual machines (VMs), running simultaneously from a single or pooled hardware system.

Each VM has its own operating system and can act as an independent server or computer. Essentially, virtualization paves the way for efficient hardware utilization because it enables you to maximize a single machine’s full capacity by distributing resources across several VMs. Server virtualization is made possible by software called hypervisors which take the physical resources and divide these among the VMs created on top of it.

There are two types of hypervisors. Type 1 hypervisors (bare metal hypervisors) are installed directly on hardware like a server to create multiple virtual servers and are commonly used in most large enterprises’ virtualized environments. On the other hand, type 2 (hosted hypervisors) sit on top of an operating system (OS) known as the host OS and are used mostly by individuals who wish to run different operating systems on a single computer or device such as a laptop or PC.

Benefits of Virtualization

There are many major benefits to using virtualization in your organization, such as:

Applications of Virtualization

The table below summarizes the many ways that virtualization can be applied.

Application Description
Server virtualization Enables server consolidation by creating multiple virtual servers, each running different applications, from one physical hardware system.
Desktop virtualization Allows you to run multiple desktop operating systems on the same computer. Desktop virtualization can either be virtual desktop infrastructure (VDI) or local desktop virtualization.
Data virtualization Gives users the opportunity and ability to manipulate data using an abstraction environment that runs outside of the actual database and data structure.
Storage virtualization Allows all storage devices connected to the network to be managed as a single storage system.

Definition of Cloud Computing

Cloud computing is a delivery model that facilitates convenient, on-demand access to a shared pool of configurable resources. These shared computing resources such as storage, networks, and servers can be provisioned rapidly and easily over the cloud via self-service, with minimal management and little to no interaction with the service provider’s staff.

There are generally three service models for cloud computing:

Benefits of Cloud Computing

Utilizing cloud services offers several key advantages to businesses:

Applications of Cloud Computing

The table below summarizes the many ways that cloud computing can be applied.

Application Description
Big data analytics With data being a valuable commodity today, cloud tools are used for big data analytics, tapping into vast pools of structured and unstructured data to harness relevant business insights over highly scalable cloud environments.
Collaboration and communication tools Cloud computing is used widely in work teams who need to communicate and collaborate often. Well-known services include Google Workspace, Zoom, and Microsoft Teams.
Streaming services Cloud computing is used in popular entertainment streaming services such as Netflix and Spotify. Streaming is also utilized in solutions that manage real-time data logs.
Storage Cloud storage makes it possible for users to store, access, and retrieve files from any web-enabled device, making the process much easier and faster.

A Head-to-Head Comparison of Cloud Computing vs. Virtualization

Given a general understanding of how both virtualization and cloud computing work, let’s see how they differ from each other. Here’s a head-to-head comparison between the two based on seven key areas.

Note that in these comparisons, we are excluding private clouds because, in such environments, organizations deal directly with hypervisors and underlying physical hardware as they would with a virtualization environment. On the contrary, in public clouds (SaaS, IaaS, PaaS), it’s the cloud provider that handles those elements.

Key Area Virtualization Cloud
Service Type Licensing SaaS, IaaS, PaaS
Installation Installed on on-premises servers. With infrastructure on hand, setup typically requires installing hypervisor software to create and manage VMs, plus the OSs and applications that run on top of it. No need for any installation whatsoever for SaaS platforms, while IaaS and PaaS services require installation and configuration of software (e.g., OSs and applications), but not the hypervisor software.
Scalability Can support VMs according to the capacity of the physical hardware. More host machines may be added, but this would require additional spending for physical infrastructure. Cloud capacity is practically limitless, with the service provider taking care of the hardware requirements. Allows companies to scale up or down according to their needs.
Flexibility Although you can spin up or spin down VMs easily, you still have limited flexibility if you consider the substantial hardware requirements. Optimal flexibility, as you don’t need to worry about hardware. Various types of cloud deployments and delivery models allow companies to try different solutions and upgrade as needed.


Requires dedicated hardware to create multiple virtual machines. No hardware needed whatsoever.
Integration Can integrate with private and public clouds, databases, IoT devices, and legacy applications (with additional software). Can integrate with existing solutions and applications, but legacy software may be tricky and require some workaround.
Disaster Recovery Allows companies to create multiple redundancies of a VM to avoid extended downtime even if a server fails. Most cloud service providers maintain multiple datacenters across the globe to ensure that organizations/users have access to their data anytime.

Virtualization requires physical servers to provide the resources for the virtual machines. Hence, increasing the number of VMs beyond the capacity of existing hardware means that the business will have to acquire additional servers to support them. With a cloud solution, however, adding more VMs simply means leasing more resources from your cloud service provider, which you can do without much effort in a matter of minutes. In terms of costs and scalability, the cloud is the easier and more cost-efficient option because it doesn’t require much time or additional investment to scale up.

An organization may choose to utilize virtualization to build an internal, private cloud (a cloud created within the organization using its own hardware). However, this is a more costly venture compared to a hosted private cloud, which is used solely by one company but hosted by a third party, or a public cloud, which is shared with other businesses. The main reason you would do this is if, perhaps due to privacy concerns, you would like to have more control over your VMs and your data.

The Right Solution for You

Now you know how the two technologies differ and each of their benefits. The question in this virtualization vs. cloud debate should not be whether one is better than the other, but which is right for your organization.

Businesses deploy virtualization technology within their IT environments to maximize the use of existing hardware and save on administrative and operating costs. On the other hand, clouds are designed to make computing power available to companies that require additional hardware resources but don’t have the budget for costly IT infrastructure. If you already have a virtualized environment but need to expand further, it would probably make more sense to move to a cloud if you see that demand could spike higher than you can keep up with.

Still, while virtualization seems to be the more restrictive and expensive technology, it’s also important to evaluate these solutions beyond the factors of cost, scalability, and flexibility. For instance, if privacy is a huge concern for your enterprise, it’s worth noting that the more common option of using the public cloud means you would be sharing the datacenter with other companies and entrusting the security of your data to a third party. This is where the importance of choosing a reliable cloud service provider comes in.

Ultimately, there is no clear-cut basis for choosing either cloud or virtualization. Organizations should take time to evaluate their needs properly and see which solution works better in addressing them.

Discover How Parallels RAS Can Offer You Both Solutions

Parallels® Remote Application Server (RAS) is a VDI solution that delivers virtualized applications and desktops remotely over the internet. You can deploy it on-premises, on your in-house virtual environment/private cloud, or on a public cloud such as Amazon Web Services (AWS) or Azure.

Parallels RAS has a comprehensive virtualization feature pack offered in one single package. Parallels RAS makes it easy to implement and manage your cloud infrastructure from a single pane of glass. It’s easy to deploy and use without requiring any specialized technical experience.

Enhance the capabilities of your virtualization and cloud environments. Try Parallels RAS today.