Lots of small business owners have heard the term ‘virtualization’ but may not understand some of the technical details, or the benefits. So I’d like to spend a few minutes giving you a brief run down of what it is, how it works, and what it means for you.

(This article is also a prequel to our next post, covering Windows 7 and XP mode)

The first question of course is: what is virtualization? Basically put, it’s the process of creating a “pretend” computer on top of an existing computer (called the Host), using some special software. This software (often referred to as a ‘hypervisor’) uses and mimics the hardware of the Host to create Virtual Machines.

From a business perspective, think of it like a holding company: you have a numbered holding company, which is the sole owner of a couple different  subsidiaries. As far as the public knows, there are several different independent companies. But in reality, they’re all the same company in the back. Same thing with Virtual Machines; it looks like a bunch of different machines to the outside, but inside it’s really one machine with a bunch of others piggy-backing on top, and using the same resources like disk space, memory, and so on.. That’s basically what it is.

How it works is a bit more complicated, and I certainly won’t get technical about it. Essentially, you acquire some special software (which is usually free or simple implementations) and install it on your computer. The software (the Hypervisor, remember?) manages the relationship between the Virtual Computer and the hardware of the Host computer. When you install the Hypervisor, you tell it some key info, like “I want my virtual computer to have X amount of hard disk space, and it should use This much memory.

What’s the catch? System requirements. Remember you’re going to have  multiple computers sharing the same hardware. Which means that if your computer is under-powered, then BOTH your Host and your Virtual machines will under-perform. If you’re going to run a Virtual Machine, you should have at least a 2 GHz processor and at least 2 GB of RAM memory.

And now the big question: why you should care. And the answer is money. If you have a growing business, and you need to keep expanding the number of computers you use as servers, virtual machines can save you money. How? Well, when you install a Virtual machine, you still need a valid operating system license (no, it won’t use the license of the Host). But you don’t need to buy more hardware.

Let’s say that you buy yourself a single BIG server. It cost you $12k, but it’s cutting edge stuff, and really powerful. Then you start installing virtual machines. And let’s say you install 5 virtual machines, each for a different role. Maybe one is for accounting, another one is your web server… whichever. Each of those 5 servers would likely cost you $4k each, PLUS you have the original (host) server as well. So you have 6 servers running, and you spent $12k on hardware. If you’d bought 6 servers at $4k each, you’d have spent $24k.

The other side to this is that if you’re a growing business, using virtual machines means that you can scale up quickly. Need more capacity? Just add a new virtual machine. no more time wasted shopping for a server, or waiting for it to arrive.

Of course, this is an over-simplification of the process. And there are other considerations that have to be taken into account, like redundancy or fault tolerance. But hopefully I’ve explained the principle in a way that makes sense. As always, talk to your technical service provider to see whether or not this is for you. And get ready to go to the next level.