Episode 22: What is virtualisation?

Virtualisation sits at the heart of modern cloud computing, yet it is often misunderstood. This blog explains what virtualisation is, why it matters, and how it shapes technology procurement decisions. By breaking down the underlying technology in a simple, practical way, it helps procurement professionals understand what they are really buying when they choose cloud services.

What virtualisation actually is

Computers have become increasingly powerful over the last several decades, with huge increases in CPU power, memory, and storage. By the 1980s, a key concept emerged: virtualisation.

Virtualisation allows a single physical computer to be carved into several smaller, virtual computers. A piece of software called a hypervisor sits on top of the physical hardware and creates virtual CPUs, virtual RAM, and virtual disk. These virtual computers look and behave like physical machines, even though they only exist as software.

For example, a server with 10 CPUs, 100GB of RAM, and a terabyte of disk could be split into 10 virtual machines, each with a share of those resources. Each virtual computer can then run its own workload, sized to match what it needs to do.

Why virtualisation became so powerful

Virtualisation opened the door to using hardware far more efficiently. If multiple virtual computers are created but only one is actively doing work, the hypervisor can allocate all available CPUs to that busy virtual machine. Resources can be shifted instantly, without anyone touching physical hardware.

Virtual machines can also be switched on or off in seconds. Because everything is software-controlled, organisations can scale workloads up, down, or across machines without physical intervention.

Over time, virtualisation engines have become extremely advanced, enabling fine-grained control of resources and much smarter distribution of workload demand.

How virtualisation underpins cloud computing

Cloud providers like Microsoft Azure, Amazon Web Services, and Google Cloud take this concept and scale it dramatically. They buy enormous physical servers, place them in huge data centres, and virtualise them thousands of times over.

What customers actually buy from a cloud provider is not a physical server, but a slice of a much larger machine: virtual CPUs, virtual RAM, and virtual disk. These virtual machines sit alongside many others on the same physical infrastructure, allowing providers to share unused resources between customers.

This shared, software-controlled model is what makes cloud computing so scalable and profitable. Cloud providers use resource pooling, contention management, and dynamic allocation to maximise efficiency and keep costs competitive.

Why understanding virtualisation matters in procurement

When organisations buy cloud infrastructure, they are not purchasing hardware they can own, capitalise, or depreciate. Instead, they are purchasing an operational service delivered through somebody else’s physical infrastructure.

This means the financial treatment changes. Buying your own servers is a capital expenditure, spread across several years. Buying virtual machines from a cloud provider is operational expenditure, paid for as an ongoing service.

For procurement professionals, understanding virtualisation helps frame these commercial differences and provides clearer insight into what is actually being purchased.

For organisations looking to make smarter, more informed decisions when procuring cloud infrastructure, get in touch.