Virtualization is based on concepts that go all the way back to the 1960s and 1970s but only took off in the 1990s and 2000s given the increasing demand for computing power. Today it is standard practice in IT enterprise infrastructure. Simply put, Virtualization uses software programs in order to stimulate hardware functionality to create one or more virtual systems. Cloud computing is one of the most common use cases.
How does it work?
Virtualization allows a computing environment to run several independent systems – so-called virtual machines – simultaneously. These virtual machines share the same physical IT infrastructure and are managed and coordinated by an additional software interface named hypervisor. Virtualization provides the possibility of making more efficient use of IT infrastructure resources by allowing enterprises to operate on several operating systems, multiple virtual systems, and various applications on a single server. One example is segmenting server capacities into smaller parts that allows the distribution of the server's capabilities among many users and environments.
Market segment: Server virtualization
Almost any type of IT infrastructure can be virtualized, including servers, desktops, networks, storage, data, applications, data centers, CPUs, and GPUs. Serverless is a cloud-native model that enables developers to build and run applications without needing to manage servers. In 2022, 23 percent of respondents worldwide stated that their company adopted a serverless status, while another 28 percent were planning to go serverless in the next 18 months. Some of the main advantages that serverless computing offers over a traditional cloud-based or server-centric infrastructure is greater scalability, flexibility and reduced costs. By contrast, the main barrier to serverless adoption was the requirement for company application(s) to integrate with other cloud services that were currently unavailable.
Market segment: Network virtualization
Network virtualization can combine multiple physical networks to one virtual software-based network, or it can divide one physical network into separate, independent virtual networks. In 2022, the global virtual private network (VPN) market size was valued at 44.6 billion U.S. dollars and is expected to almost double its size by 2026. A VPN will extend a network securely from a private known location across a public network, as if networks were directly linked. Consequently, it comes as no surprise that the main reason justifying VPN usage worldwide was security. VPNs are particularly popular among consumers when it comes to hiding their real network location, whether to access geo-blocked services or to bypass other restrictions like censorship. Corporate VPN usage on the other hand, is frequently used in order to provide employees with corporate intranets access when working remotely or traveling.
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Lionel Sujay Vailshery
Research expert covering the consumer electronics industry