With virtualization, you can dynamically fire up and take down virtual servers (also known as virtual machines), each of which basically fools an operating system (and any applications that run on top of it) into thinking the virtual machine is actual hardware. Running multiple virtual machines can fully exploit a physical server's compute potential -- and provide a rapid response to shifting datacenter demands.

The concept of virtualization is not new. As far back as the 1970s, mainframe computers have been running multiple instances of an operating system at the same time, each independent of the others. It's only recently, however, that software and hardware advances have made virtualization possible on industry-standard, commodity servers.

In fact, today's datacenter managers have a dizzying array of virtualization solutions to choose from. Some are proprietary, others are open source. For the most part, each will be based on one of three fundamental technologies; which one will produce the best results depends on the specific workloads to be virtualized and their operational priorities.

Full virtualization

The most popular method of virtualization uses software called a hypervisor to create a layer of abstraction between virtual servers and the underlying hardware. VMware and Microsoft Virtual PC are two commercial examples of this approach, whereas KVM (kernel-based virtual machine) is an open source offering for Linux.