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The potential for information technology to drive business success has never been greater. Advances in software, devices, and networks are transforming the way companies streamline communications, automate processes, and enable employees to access the information and capabilities they need to respond to new opportunities.
At the same time, the complexity of IT has never been higher. Business success increasingly depends on providing mobile employees with easy access to corporate computing resources. People who use instant messaging, social networking sites, and other relatively new communications technologies at home expect to use similar tools at work.

The result is a growing number of contradictory requirements: ease of access vs. security and compliance; performance vs. cost; innovation and agility vs. reliability and continuity. For IT professionals, the real challenge is resolving the tension inherent in trying to create an infrastructure that provides both the flexibility to enable employees to drive business success and the control to protect corporate resources, maintain compliance, and provide continuity.

Helping companies find the right balance is one of Microsoft most important priorities. To do that, we are focused on technology innovation that will enable companies to build systems that have the flexibility and intelligence to automatically adjust to changing business conditions by aligning computing resources with strategic objectives. This is a vision we call Dynamic IT. Virtualization technologies that provide powerful new tools for creating more efficient, flexible, and cost effective IT systems will provide a critical foundation for bringing this new vision to life.

Understanding Virtualization

Virtualization is an approach to deploying computing resources that isolates different layers hardware, software, data, networks, storage from each other. Typically today an operating system is installed directly onto a computer hardware. Applications are installed directly onto the operating system. The interface is presented through a display connected directly to the local machine. Altering one layer often affects the others, making changes difficult to implement.

By using software to isolate these layers from each other, virtualization makes it easier to implement changes. The result is simplified management, more efficient use of IT resources, and the flexibility to provide the right computing resources, when and where they are needed. There are different types of virtualization. Machine virtualization uses software to create a virtual machine that emulates the services and capabilities of the underlying hardware. This makes it possible to run more than one operating system on a single machine. On servers, this approach is called server virtualization; on end user PCs, it is called desktop virtualization. Application virtualization separates the application from the operating system, reducing conflicts between applications, which can simplify deployments and upgrades. Presentation virtualization enables an application on a computer in one location to be controlled by a computer in another. There is also storage virtualization, which lets users access applications and data without having to worry about where they are stored. And network virtualization allows remote users to tap into a company network as if they were physically connected.

Virtualization is not new. IBM first introduced virtual machine technology for mainframe computers in the early 1960s. Microsoft Windows NT included a virtual DOS machine. Virtual PC was introduced by Connectix in 1997  EMC VMware introduced its first product, VMware Workstation, in 1999. Softricity introduced SoftGrid, the first application virtualization product, in 2001 .

Currently, industry analysts estimate that fewer than 10 percent of servers are virtualized despite the fact that virtualization has been around for many years. But its significance is growing as companies have introduced products that target today high-volume, low-cost hardware. Now  more and more companies are using server virtualization to save money by consolidating the workload of several servers onto a single machine.

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