1. Business Ideas
  2. Business Plans
  3. Startup Basics
  4. Startup Funding
  5. Franchising
  6. Success Stories
  7. Entrepreneurs
  1. Sales & Marketing
  2. Finances
  3. Your Team
  4. Technology
  5. Social Media
  6. Security
  1. Get the Job
  2. Get Ahead
  3. Office Life
  4. Work-Life Balance
  5. Home Office
  1. Leadership
  2. Women in Business
  3. Managing
  4. Strategy
  5. Personal Growth
  1. HR Solutions
  2. Financial Solutions
  3. Marketing Solutions
  4. Security Solutions
  5. Retail Solutions
  6. SMB Solutions
Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.
Grow Your Business Technology

The Pros and Cons of Virtualization

The Pros and Cons of Virtualization
Virtualization offers many benefits — and drawbacks, too. / Credit: Virtualization image via Shutterstock

Virtualization often sounds like the Holy Grail of IT infrastructures. But is this truly the case for small businesses?

Virtualization has several benefits. For businesses with limited funds, virtualization helps them stay on budget by eliminating the need to invest in tons of hardware. Virtualization also helps businesses with limited IT staff by automating routine IT tasks and centralizing resource management. Furthermore, employees enjoy the luxury of being able to access their data anytime, anywhere, using any device. Nevertheless, virtualized environments have some drawbacks. Here are the major pros and cons of virtualization.

Virtualization helps businesses achieve cost savings in several areas. Julia Lee, senior product marketing manager at virtualization solutions provider VMware, divided these cost savings into three categories: capital expenditure savings, operational expenditure savings and energy savings.

  • Capital expenditure savings. Virtualization lets companies reduce their IT costs by requiring fewer hardware servers and related resources to achieve the same level of computing performance, availability and scalability.
  • Operational expenditure savings. Once their servers are virtualized, IT staffs can greatly reduce the ongoing administration and management of manual, time-consuming processes by automating operations, thus resulting in lower operational expenses.
  • Data-center and energy-efficiency savings. As companies reduce the size of their hardware and server footprint due to the use of virtualization, they lower their energy consumption, cooling power and data-center square footage, thus resulting in lower costs. [Virtualization Solutions for Small Businesses]


Although virtualization ultimately lowers IT costs, its main downside is that it requires higher up-front costs, said David Boone, CEO of Paranet, an IT consulting firm that specializes in data-center and network-infrastructure solutions. This is due primarily to server costs, he said.

"Servers that can be effectively turned into virtual servers cost more than more-conventional servers," Boone said. "Most companies will spend more up front to [implement] server and desktop virtualization than what they would spend merely to upgrade to new servers and desktop software," he noted.

When considering costs, businesses should instead look at virtualization as a long-term venture. "The return on investment (ROI) comes over time," Boone said.

In addition to reduced IT costs, virtualization enables businesses to get the most out of their investment in hardware and resources.

A key benefit of virtualization is the ability to consolidate and contain the number of servers needed, which, in turn, allows businesses to run multiple application and operating system workloads on one server, Boone said.

"Instead of 20 servers, maybe they'll need only one," he said. "Some of our clients have consolidated up to 30 or 40 workloads on a single server, and that allows them to better use the physical space available."

In contrast, traditional infrastructures that use multiple servers don't make the most out of their setups.

"Many of those servers would typically not utilize more than 2 to 10 percent of the server hardware resources," said John Livesay, vice president of Infranet Technologies, a network infrastructure services provider. "With virtualization, we can now run multiple virtual servers on a single virtual host [and make] better use of the resources available."

This helps businesses better manage their resources for the most efficient use. Virtualization enables resource management, the critical practice of using constraints, scheduling and partitioning to increase the flexibility of computing environments, Boone said. One example of resource management is load balancing, which helps improve utilization and performance.

"As server workloads vary, virtualization allows the spreading of work to underutilized servers," Boone said. This also speeds up performance and helps prevent unnecessary downtime, he said.

The drawback, however, is that not all servers and applications are virtualization-friendly, Livesay said. "Typically, the main reason you may not virtualize a server or application is only because the application vendor may not support it yet, or recommend it," he said.

Nonetheless, virtualization is highly scalable. It lets businesses easily create additional resources as required by many applications, such as by easily adding extra servers — it's all done on-demand on an as-needed basis, without any significant investments in time or money.

IT can create new servers quickly because they do not need to purchase new hardware each time they need a new server, Livesay said. "If the resources are available, we can create a new server in a few clicks of a mouse," he added.

The ease of creating additional resources also helps businesses scale as they grow. "This scenario might be good for small businesses who are growing quickly, or businesses who are using their data center for testing and development," Livesay said.

Businesses should keep in mind, though, that one of the main goals and advantages of virtualization is the efficient use of resources. Therefore, they should be careful not to let the effortlessness of creating servers result in the carelessness of allocating resources. 

"Server sprawl is one of the unintended consequences of virtualization," Livesay said. "Once administrators realize how easy it is to add new servers, they start adding a new server for everything. Soon, you find that instead of 6 to 10 servers, you are now managing 20 to 30 servers." 

Originally published on Business News Daily.

Sara Angeles

Sara is a tech writer with a background in business and marketing. After graduating from UC Irvine, she worked as a copywriter and blogger for nonprofit organizations, tech labs and lifestyle companies. She started freelancing in 2009 and joined Business News Daily in 2013. Follow Sara Angeles on Twitter @sara_angeles.

See All