While cloud computing and virtualization appear to be synonymous, there are some basic differences between the two. At the same time, they are intricately related to each other to the extent that these terms have often been used interchangeably. It is necessary to understand the scope of the two technologies to identify where they are distinct from each other. 

• The best way one can distinguish between cloud-computing and virtualization is that the former is a service while virtualization is a technology which forms the basis of this service. Cloud computing cannot exist in the absence of virtualization but virtualization can easily exist in the absence of cloud. Cloud computing refers to a hosting solution where the computing resources are offered as services in real time through the Internet. Amongst the many factors which distinguish between cloud-computing and virtualization, there are some key ones like power to scale up the resources, wide network access, self-service for the users etc.

• When you are creating a virtual environment, it is called virtualization. This helps to distinguish the physical set-up to produce multiple dedicated resources. So, users can run multiple OS on a single computer. Virtualization powers cloud computing but it is not the same as cloud computing. When you deliver shared resources on an on-demand basic across the Internet, it is called cloud computing.

• Cloud computing is the service you get when hardware is manipulated through virtualization. Both these technologies are needed to offer different services, particularly when you must create a private cloud. You will have to use the two technologies separately for the small businesses to get desirable results. Businesses can save on their capital expenses when they choose cloud computing. So, cloud hosting will offer elasticity and scalability and a pay-as-you-use system. Virtualization can be deployed even without clouds but to get cloud hosting, you must have virtualization.

• Cloud computing offers resources that can be accessed through the Internet and these are not installed on the organization’s network. Businesses are free to choose from various cloud hosting plans and cloud vendors to satisfy their business goals. Enterprise-level applications such as off-site storage and CRM may be installed with cloud computing. In comparison, virtual machines will run their choice of OS and applications that you business may need. Virtualization needs less hardware to get the same work done; it is a technology which makes cloud hosting possible. It can separate the physical infrastructure allowing you to run many operating systems on a single server. This is turn will help to cut down costs and enhances efficiency. Virtual environment is likely to have less redundancy. It guarantees maximum usage of the hardware that has been invested in. 

• Virtualization basically abstracts the workload from the hardware and this makes way for pooling of computing resources which can be then dynamically allocated to client enterprises on demand basis. It will not alone make a cloud; to become cloud computing it needs to have some essential features like resource pooling, rapid elasticity, broad network access, pay-as-you-go model etc.

• Cloud computing offers flexible and hassle-free backup and data recovery solutions. A cloud vendor can also deploy cloud computing faster so that the system can become functional within only a few minutes. So, when your intention is to get outsourced IT the cloud computing model is the best suited for you. It will free up your internal resources which can then focus on developing other important areas of the business. So, the cloud is an excellent option when you want to limit the number of servers and desire a one-stop solution. Cloud hosting is also flexible and scalable; you can upgrade the resources as and when needed. Virtualization will let a single computer act like multiple computers while the cloud will make it possible for different businesses to access a single application. Cloud technology is a service and virtualization is deployed locally. 

To understand whether your business needs cloud computing or virtualization, you must analyze your business needs first. It is important to consider the capital and operational costs, scalability needs, security requirements etc. Businesses which have limited IT staff, less security threats and work on an OPEX model prefer the cloud hosting solutions. In comparison, businesses which demand more control for security and integration and which work on the CAPEX model prefer virtualization. Each of these two technologies has its own benefits and they are definitely not competing approaches. Cloud computing is more of an evolution of virtualization technology. Businesses which choose virtualization of their servers may use cloud computing in the years to come.

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