Virtualization Makes Servers Faster, More Reliable Machines
Virtualization is a means to improve IT performance - in some cases dramatically - for computers ranging from simple home PCs to complex server systems.

Virtualization is an information technology concept and practice that is gaining in popularity of late, with those utilizing virtualization seeking performance gains without significantly greater costs. To understand this concept, it is first important to understand exactly what virtualization is. While there are various types of virtualization, that which is revolutionizing computing and hosting environment involves running multiple virtual machines on a single computer or server. Essentially, this means running multiple guest operating systems (OS) on a single (host) computer.
Of course, the question then becomes - why is this an advantage? Put simply, running multiple operating systems allows applications to be run alone or in small groups, thus segmenting hardware resources for various applications that are resource-intensive. In many instances, applications that are run on a server are intended to stand alone on the server. In the past, this meant utilizing multiple physical servers, thus increasing IT hardware costs out of proportion to performance gains.
With virtualization, however, a single computer can be segmented into multiple operating systems and "slices" of that computer's hardware can be utilized to run an application. In this sense, there is a specific dedication of hardware resources to specific applications. Of particular interest is the fact that the additional operating systems, as well as the host OS, need not be the same. A host system utilizing a Windows OS can run guest operating systems that are Windows-based or any combination of Unix, Linux, BSD or other operating systems.
While virtualization represents a net gain in computing power, there are also implications in the form of "performance overhead." In short, virtualization requires more resources than a single OS installation, but can be tweaked to lead to performance gains. Below is a brief overview of virtualization resource allocation for processing, memory, storage and networking.
Processing: CPUs
For applications that are processor-intensive, CPU virtualization can mean a reduction in overall performance. However, many virtualization setups create load balancing for processors that overcomes this problem. Virtual machines can also fully utilize multi-core processors as well as multi-processor configurations, meaning that virtualization can work for CPU-intensive applications as long as load balancing is properly set up and utilized.
Memory: RAM
While the virtualization set up itself will require a small amount of RAM, this is relatively minimal and only truly limits the set up in terms of the number of guest operating systems (virtual machines) that can be set up. If a large number of virtual machines are not required, this will almost never present any serious problems. Advanced virtual machine set up can also allocate RAM dynamically, so that unused RAM within a virtual machine will not go unutilized.
Storage: I/O
Since a virtual machine includes an individual operating system, there is disk space overheard in such a setup. However, operating systems can be set up to run as lean as possible for the given application that the VM will run. Many virtual machine setups will allow shared access to hard drive slices, increasing throughput and offering a solid solution for I/O-intensive applications.
Networking
Probably the least affected aspect of virtual machines is networking capability, which is virtually the same as that for a physical machine. Virtual machines can be set up with their own IPs and can utilize multiple network interface cards so that networking between virtual machines is very fast, as is networking between physical machines.
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