Technology keeps moving forward, and two terms that often come up together are virtualization and cloud computing. At first, they might sound the same, but they are not. Virtualization is the foundation that makes cloud computing possible, while cloud takes it a step further by delivering IT resources as a service over the internet.

In this blog, we’ll start by breaking down what virtualization really means, how it works, and why it’s important. Then we’ll move into cloud computing, the different service models, and how it has changed the way businesses and individuals use technology. By the end, you’ll have a clear understanding of the difference between the two and how they work hand in hand.

Servers Before Virtualization

Before virtualization came into the picture, companies relied heavily on physical servers. Each server was built to run a single operating system and a specific application. For example, one server might be dedicated just for email, another one for databases, and another for file storage.

The problem with this setup was inefficiency. Most of these servers were not fully used. A server could be running at only 15–20% of its capacity, but it still consumed the same amount of power, cooling, and maintenance costs as a fully loaded server.

On top of that, adding new servers meant buying more hardware, setting it up, and finding space in the data center. This not only required money but also time and effort from IT staff. The more applications a business needed, the more servers had to be installed, which quickly became expensive and difficult to manage.

What is Virtualization?

Virtualization is the technology that allows you to run multiple operating systems and applications on a single physical server. Instead of one server being locked to just one task, virtualization uses a software layer called a hypervisor to divide the physical resources (CPU, memory, storage, and network) into separate virtual machines (VMs).

Each virtual machine acts like a real computer with its own operating system and applications, but in reality, they are all sharing the same physical hardware. This means one physical server can host many virtual servers at the same time, each working independently.

The result is much better efficiency. Instead of running multiple underused servers, businesses can run several workloads on fewer machines. This saves money, reduces energy use, and makes it easier to scale when new applications are needed.

Why Virtualization?

Virtualization solved many of the problems that came with relying only on physical servers. Here are the main reasons why it became so important:

1. Better Resource Utilization
Physical servers often wasted resources because they ran below capacity. Virtualization allows multiple workloads to share the same hardware, making full use of CPU, memory, and storage.

2. Cost Savings
Fewer physical servers are needed, which means lower hardware costs, less electricity, and reduced cooling needs in data centers.

3. Flexibility and Scalability
New virtual machines can be created in minutes instead of waiting days or weeks to set up new physical servers. This makes it easy for businesses to scale up or down as needed.

4. Easier Management
IT staff can manage multiple virtual machines from a central console. Backups, updates, and migrations can all be handled more efficiently.

5. Business Continuity
Virtualization supports features like live migration, snapshots, and quick recovery. If one server fails, virtual machines can be moved to another server with minimal downtime.

Type 1 and Type 2 Hypervisors

At the heart of virtualization is the hypervisor, the software that creates and manages virtual machines. There are two main types you should know about:

Type 1 Hypervisor (Bare-Metal)
A Type 1 hypervisor runs directly on the physical hardware. There’s no need for an underlying operating system. Because it has direct access to hardware, it offers better performance, security, and efficiency. This type is commonly used in enterprise data centers. Examples include VMware ESXi, Microsoft Hyper-V, and Citrix XenServer.

Type 2 Hypervisor (Hosted)
A Type 2 hypervisor runs on top of an existing operating system, like Windows or Linux. It behaves like an application that allows you to create and run virtual machines. While it’s easier to set up and good for personal or testing use, it’s generally less efficient than Type 1 since it depends on the host operating system. Examples include Oracle VirtualBox and VMware Workstation.

To put it simply, Type 1 is built for large-scale, professional environments, while Type 2 is more for desktops, labs, and smaller projects.

Connecting Virtual Machines to the Network

Just like physical servers, virtual machines need to connect to a network to communicate with each other, access the internet, or reach other resources. Hypervisors make this possible by using virtual switches.

A virtual switch works much like a physical network switch. It allows virtual machines on the same host to communicate, and it can also connect them to the physical network outside the server.

There are different ways to connect VMs depending on the setup:

Bridged Networking – The VM connects directly to the physical network through the host’s network card. It acts like a separate computer on the same network.
NAT (Network Address Translation) – The VM uses the host’s IP address to access the outside network. This is common when you just want internet access without exposing the VM directly.
Host-Only Networking – The VM can only communicate with the host machine and other VMs in the same host-only network. It has no internet access.

These options give flexibility depending on whether the VM needs full network access, limited communication, or just testing within a safe environment.

What is Cloud Computing?

Cloud computing is the delivery of computing services like servers, storage, databases, networking, and applications over the internet. Instead of buying and maintaining physical hardware, businesses and individuals can rent these resources from cloud providers and pay only for what they use.

The cloud builds on top of virtualization. While virtualization lets you run multiple virtual machines on one physical server, cloud computing takes it further by pooling these virtual resources and making them available on demand, anytime and anywhere through the internet.

This means you don’t have to worry about the hardware, space, or power needed to run servers. Cloud providers handle the infrastructure while you focus on using the services.

Types of Cloud Services

Cloud computing is usually grouped into three main service models:

1. Infrastructure as a Service (IaaS)
This provides virtualized computing resources over the internet. You can rent servers, storage, and networking without having to buy physical hardware. Examples include Amazon EC2, Microsoft Azure Virtual Machines, and Google Compute Engine.

2. Platform as a Service (PaaS)
This goes a step further by providing not just infrastructure but also tools and frameworks for building and deploying applications. Developers can focus on coding without worrying about managing servers or operating systems. Examples include Google App Engine and Heroku.

3. Software as a Service (SaaS)
This delivers ready-to-use software applications over the internet. You don’t need to install or maintain them. Just open your browser and use them. Examples include Gmail, Microsoft 365, and Dropbox.

Each model offers different levels of control and responsibility, but together they give flexibility for businesses and users depending on their needs.

NIST Definition of Cloud Computing (SP 800-145)

To bring consistency to how people understand cloud computing, the National Institute of Standards and Technology (NIST) released a formal definition in its publication SP 800-145. This document is often used as the standard reference when describing what cloud computing really means.

According to NIST, cloud computing has five essential characteristics:

On-Demand Self-Service – Users can access computing resources whenever they need them without human interaction from the provider.
Broad Network Access – Services are available over the network and can be accessed through standard devices like laptops, smartphones, or tablets.
Resource Pooling – The provider’s resources are pooled together to serve multiple users, with resources dynamically assigned and reassigned based on demand.
Rapid Elasticity – Resources can be quickly scaled up or down depending on user needs, often appearing unlimited to the customer.
Measured Service – Cloud systems automatically control and optimize resource usage, with usage being monitored, measured, and billed accordingly.

This definition helps separate cloud computing from simple virtualization or traditional hosting. It shows that cloud is not just about running virtual machines, but about delivering flexible, scalable, and measured IT services over the internet.

Five Essential Characteristics of Cloud Computing

As defined in NIST SP 800-145, cloud computing has five key characteristics that make it different from traditional IT setups:

1. On-Demand Self-Service
Users can quickly get computing resources like servers or storage whenever they need them, without waiting for IT staff or provider approval.

2. Broad Network Access
Cloud services are accessible over the internet through standard devices such as laptops, tablets, and smartphones. This makes them available from almost anywhere.

3. Resource Pooling
The cloud provider’s resources are shared among many customers. These resources are dynamically assigned and reassigned depending on demand, often in a way that’s invisible to the user.

4. Rapid Elasticity
Cloud resources can expand or shrink as needed. For the user, it feels almost unlimited. If demand increases, resources are added automatically; if demand decreases, they are reduced.

5. Measured Service
Cloud usage is monitored and billed based on what you actually use. This could be storage space, processing power, or bandwidth. It’s similar to how you pay for utilities like electricity or water.

These five characteristics are what make cloud computing flexible, scalable, and cost-effective compared to traditional IT solutions.

Cloud Deployment Models

Cloud computing is not a one-size-fits-all solution. Depending on needs, organizations can choose from different deployment models. The most common are:

1. Public Cloud
In a public cloud, the infrastructure is owned and operated by a third-party provider. Services are delivered over the internet and shared among multiple customers. It’s cost-effective and scalable, but resources are not dedicated to a single organization. Examples include AWS, Microsoft Azure, and Google Cloud.

2. Private Cloud
A private cloud is dedicated to a single organization. It can be hosted on-premises or by a provider, but the resources are not shared with others. This gives more control, security, and customization, though it is usually more expensive.

3. Hybrid Cloud
Hybrid cloud combines public and private clouds, allowing data and applications to move between them. This provides flexibility: sensitive workloads can stay in the private cloud, while less critical workloads take advantage of the public cloud’s scalability.

4. Multi-Cloud
Multi-cloud means using services from more than one cloud provider. Organizations choose this approach to avoid being locked into a single vendor and to take advantage of the unique strengths of each provider.

Choosing the right model depends on factors like cost, security needs, compliance requirements, and scalability goals.

Summary

We started by looking at how servers were used before virtualization, where each physical server ran a single task and often wasted resources. Virtualization changed this by allowing multiple virtual machines to run on one server, managed by hypervisors (Type 1 for enterprise use and Type 2 for desktops and testing). Virtual machines can also be connected to networks through virtual switches, with options like bridged, NAT, or host-only connections.

From there, we explored cloud computing, which builds on virtualization but takes it further by delivering IT resources as services over the internet. We broke down the three main service models: IaaS, PaaS, and SaaS, and then looked at the five essential characteristics of cloud computing defined by NIST SP 800-145: on-demand self-service, broad network access, resource pooling, rapid elasticity, and measured service. Finally, we covered the different deployment models: public, private, hybrid, and multi-cloud.

Wrap Up

Virtualization and cloud computing go hand in hand. Virtualization made IT environments more efficient and flexible, and cloud computing built on that foundation to offer resources as services available anywhere, anytime. Together, they have transformed how businesses and individuals use technology.

If you’re just starting out in networking or IT, understanding these two concepts is essential. They are the backbone of today’s modern data centers and online services. Keep exploring, dive deeper into how hypervisors work, how cloud providers manage their infrastructure, and how these technologies are shaping the future of IT. The more you learn, the better prepared you’ll be to take advantage of the opportunities they create.

Understanding Virtualization and Cloud Computing