As cloud technology is heralded as this era's biggest breakthrough, it promising further levels of elasticity, cost savings, and efficiency. In this light, technology pundits are trying to identify whether there is a difference between virtualization and cloud computing, or are the two terms are interchangeable.

Cloud computing and virtualization were developed to augment the usage of computing resources whilst streamlining processes and improving efficiencies to minimize the overall cost of ownership. As experts frequently use the two terminologies interchangeably, in reality they are completely different approaches.

Virtualization is mainly a data management and system administration tool with multiple technical uses. A majority of these benefits have nothing at all to do with the cloud. By capitalizing on this technology, organizations are able use a single physical hardware and perform multiple functions simultaneously. This allows enterprises to economically use their limited resources.

On the other hand, cloud requires the Internet connection to access business applications, running in a secured hosting environment. The technology certainly leverages virtualization but can be easily accomplished without using virtualization.
 
Cloud hosting solutions are a basic utility model. It is delivered as a storage and computing service to clients over a network. In contrast, virtualization by itself is not provided to the end-users as a self service. The combination of architecture, tools, and processes aids virtualization to be provided to clients as a service. It enables enterprises to fully optimize their computing resources, yet it requires an independent system administrator to stipulate virtual machines for the customers.

Cloud servers are believed to orchestrate resources from a centralized pool and hence allow users to only pay for the resources they use. These resources, in essence, are metered according to the home utilities like water and power supplies.

Self-service in a cloud model is an essential component, critical for the on-time delivery of services to the users. In addition, self-service in a computing model is considered as an effective way of reducing the amount of human participation and technical support required within an enterprise at all levels. It is regarded as an important tool for accelerating an organization’s return on investment and a sustainable vehicle for the near future.

Moreover, with a better understanding of the synergies between virtualization and cloud technology, a company can easily visualize the movement of its existing IT assets to a remote cloud enabled data center. By identifying that the resources are dedicated in a secured and segregated virtual environment, they can focus their resources in core business activities.