Data Center Virtualization – Best Practices and Challenges

Park Place Managed Services


Phil Godfrey headshot - Park Place Technologies Solutions Architect
Phil Godfrey Published: February 17, 2025

If you operate a data center, you might have found yourself with the following issue – You’ve maxed out on rack space or are held back by power constraints. However, the volume of data you store isn’t getting any smaller, and applications need to continue to scale.

An option could be to build more data center space for a mere $7-$12 million per megawatt or perhaps rent rack space in a co-location facility, yet both of these options are capital-intensive. A third option, a virtual data center, presents a viable alternative that accommodates future scalability with a more sophisticated management platform.

A virtualized data center leverages virtualization technology, such as those provided by VMware and others, to optimize the data center by creating virtual versions of servers, storage, and network infrastructure. For x86, the main architecture for personal computers and servers, virtualization began in the early 2000s. However, virtualization goes back as far as the 1960s, where Mainframe computing is concerned.

Below, we look into data center virtualization and assess the pros and cons of the technology, as well as best practices for the data center and virtualization.

What is Data Center Virtualization?

Data center virtualization is an approach to data center design that uses virtualization software to create a virtual version of the data center. The virtual data center comprises a collection of virtual machines (VMs), virtualized storage capacity, and virtual network functions (VNFs).

Data center management occurs centrally, through a software layer that enables admins to see data center assets in a unified view. This is one of the pros of virtualization. It is more efficient to manage than its traditional counterparts.

Indeed, a great way to understand what is a virtual data center is to compare it with a traditional data center. Before the advent of data center virtualization solutions, data centers contained freestanding computer, storage, and network hardware, with each device operating independently.

Each server ran an operating system, applications, and databases. Storage arrays connected to specific servers via network cables and switches. Some maintenance and management functions could be performed from centralized operations centers, but each machine had to be managed individually. In some cases, management required manual steps like physical reboots.

The traditional approach has several problems. It’s cumbersome and labor-intensive to manage. The infrastructure is also inefficient. One machine’s capacity may be overloaded with processing demands while its neighbour is largely idle. Virtualization reduces this problem through more efficient utilization of hardware resources.

How Does Data Center Virtualization Work?

Data center virtualization is the result of hardware virtualization. How does virtualization work? For servers, virtualization uses hypervisor software to run virtual machines (VMs), a system architecture that enables multiple VMs to run on a single device — sharing the physical server’s CPU, memory, and storage. This is much more efficient and solves the capacity-balancing problem.

In parallel, data center managers use data center virtualization software with centralized consoles that can see all of the VMs in the environment and control them through software. Virtualized storage and networking work in a similar way. In some cases, a company will use data center virtualization services provided by third parties to realize the goal of having a virtualized data center. Some examples include:

  • Infrastructure as a Service (Iaas) – provides hardware (server, network, storage) and virtualisation layer
  • Platform as a Service (PaaS) – IaaS plus the operating system and databases
  • Software as a Service (SaaS – PaaS plus the application. User just needs to provide data

virtual data center architecture diagram

Virtual Data Center Deployments

There is more than one way to deploy a virtual data center. The most popular approaches, however, involve cloud computing, with significant movement away from on-premise over the last 20 years.

To understand why this is the case, it’s important to keep in mind that cloud computing is a software architecture at its core. It’s a way to develop and deploy software using specialized cloud management software solutions.

Public cloud

You can utilize a virtual data center without building one. All you have to do is deploy your software and data onto a public cloud platform like Amazon Web Services (AWS) or Microsoft Azure.

Those companies, and others, are running enormous virtual data centers and renting out virtual compute and virtual storage.

Private cloud

If you want to enjoy the flexibility of a virtual data center and a cloud architecture without having to rent VMs from AWS, you can build your own private cloud. Using a cloud management platform, you can install software and databases on virtual infrastructure.

This approach is necessary for companies in regulated industries like healthcare, which are not allowed to store data in the public cloud.

Hybrid cloud

A hybrid cloud is a type of virtual data center architecture that connects public and private cloud instances and may also link with traditional on-premises infrastructure.

It’s a flexible way to deploy a virtual data center. Reasons for this approach include a desire for higher performance in selected locations; security; and compliance. Creating a hybrid cloud is sometimes the first step in data center modernization virtualization​.

Different Data Center Virtualization Solutions

A fully virtualized data center, also known as a software-defined data center (SDDC), comprises a data center where compute, storage, and network have all been virtualized. This is a big job, so a virtual data centre services provider may be a useful partner in executing the plan.

Server Virtualization

Data center server virtualization abstracts a server’s hardware layer, allowing the hypervisor software, such as VMware ESXi/vSphere, to run one or more VMs on the same physical machine.

For example, on the same physical server, you could have a VM running the Linux operating system (OS) and the Postgres SQL database, a VM running Windows Server and Microsoft SQL Server database, and so forth.

The two VMs operate separately, sharing the same physical resources. Server virtualization benefits compared to physical, include the potential to deploy infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS).

Network Virtualization

Data center network virtualization works in a similar fashion as server virtualization. A network hypervisor abstracts the network’s physical layer from its control layer and admins can manage the network using only a software management tool.

Multiple networks can exist on the same physical network hardware. This is sometimes called a software-defined network (SDN). Individual network functions, such as firewalls, routers, and load balancers, can be implemented as virtual network functions (VNFs).

Storage Virtualization

Storage virtualization, sometimes called software-defined storage (SDS), combines storage capacity into a unified pool that can be centrally allocated using software. This approach abstracts physical storage from its management layer, improving storage utilization in the process.

Storage virtualization makes it relatively easy to scale storage for applications as required, without having to stand up storage devices. It also becomes possible to allocate data storage across different “tiers” of storage performance.

two people discussing the pros of virtualization

7 Best Practices for Data Center Virtualization

When you get started with virtualization and data center​ planning, with the goal of making your data center virtual, you can tap into extensive industry expertise and experience. You model your approach based on best practices for virtualization data center​ implementation.

Here are seven of the most useful:

1. Plan for Automating Processes

The better your plan, the better your whole experience — and the end result — will be. This means doing a careful assessment of your hardware requirements, your software and data workloads, as well as your overall goals for virtualization at the outset.

It’s a good idea to do a complete inventory of your infrastructure before you start, as you might be surprised at what you find. It may also be smart to involve an external resource to help develop a coherent and realistic plan. The most effective approach may be to roll out virtualization in stages, rather than doing it all at once.

2. Automate Processes Wherever Possible

Infrastructure automation is critical for success with data center virtualization, especially if cost-cutting is one of your goals.

Many virtual data center management solutions enable you to automate processes such as rebooting a server that’s down, dynamically moving storage from one cluster to another, and so forth. Take advantage of these capabilities.

3. Select the Right Hypervisor

The right hypervisor can make a difference in virtual data center outcomes. The best practice is to conduct a thorough analysis of available options before making a choice. Part of this will mean doing a feature-by-feature comparison between Microsoft Hyper-V and VMware vSphere, as well as KVM and others.

It’s also a good idea to take a big-picture view and select a hypervisor that aligns with your broader IT strategy and vendor relationships. For example, if you’re a “Microsoft shop” that only runs Windows Server, then having Hyper-V already built into the server operating system might make it the obvious choice.

4. Consider Resource Allocation

Virtualization lets you share computing resources like memory and CPU, which puts the onus on you. However, make sure you aren’t overloading certain resources. For example, an application that “heats up” during holiday shopping season might cause the server to slow down if isn’t allocated enough capacity.

Many virtualization tools enable automated resource allocation to solve this problem without too much effort.

5. Monitor and Optimize

Virtualized data centers tend to be more complicated than their traditional counterparts, due to shared resources, the added software management layer, and increased connectivity inside the environment.

For these reasons, it is a good practice to engage in ongoing monitoring and optimization. You will want to identify where performance is lagging, or bottlenecks in processing. Load balancing tools can help with this workload.

6. Focus on Security

Security is an important success factor in a virtualized data center, in part because the virtual architecture has the potential to expand the data center’s cyber attack surface area.

For instance, network virtualization may make it easier for a malicious actor to move laterally across the network than is possible with a conventional network. This sort of risk requires countermeasures like virtual network segmentation, network security monitoring, and so forth.

7. Anticipate and Prepare for Disaster

Virtualized data centers need robust disaster recovery (DR) plans and capabilities, as they can suffer from outages just like any other kind of IT asset or infrastructure.

The good news is that it can be easier to set up DR in a virtual data center, due to its agile nature. You can set up a mirrored instance of the virtual data center in a second location and fail over to it if you have an outage.

5 Advantages of Data Center Virtualization

Data center virtualization advantages range from simplified management to lower costs. Though it can be a considerable change for IT infrastructure managers who are used to existing processes, the benefits are evident.

1. Simpler to Manage

It’s generally considered easier to manage a virtualized data center using a centralized management console than to attend to many physical devices. Even if those devices have remote monitoring and management consoles, it can be daunting to stay on top of separate management interfaces and processes for compute, storage, and networking.

Benefits of data center virtualization when it comes to management include having comprehensive visibility. You can easily see the virtual environment’s health and level of performance, enabling proactive issue resolution.

2. More Agile

With VMs’ ability to be “spun up” and “spun down” on the hypervisor, agility is one of the more compelling data center virtualization benefits.

A virtualized data center enables rapid scaling and deployment of capacity on demand — making IT an enabler of fast-paced business strategies.

3. Lower Costs

Done right, a virtualized data center should lower infrastructure costs. Savings come from multiple sources, including a reduction in administrative personnel and better asset utilization.

Maximizing the capacity of existing hardware means buying fewer devices and better energy economics. It also translates into less demand for new data center space, which is expensive to build.

4. More Uptime

Better uptime is one of the other notable advantages of data center virtualization. While the improvement in uptime is dependent on execution, the virtualized data center is easier to configure for high availability and fault tolerance than its conventional peers. VMs can be designed to fail over to new instances, making the “hot site” approach to availability a thing of the past.

Redundancy in hardware virtualization also leads to improved resource planning and spare capacity allocation, across multiple virtualized hosts. If a physical host fails, virtualization platforms like VMware vSphere can automatically migrate workloads to other available hosts using features such as vMotion.

Virtualization ensures Uptime as it reduces reliance on single points of failure. For example, if a host fails, the redundancy ensures systems remain operational.

5. Enhanced Sustainability Processes

Better device utilization from virtualization leads to improvements in overall energy efficiency in the data center. This is important for sustainability, which is becoming increasingly important to corporations.

Gartner predicts that 75% of enterprises will have a data center infrastructure sustainability program by 2027. This will almost certainly involve virtualization as the path to greater sustainability.

data center modernization is virtualization

4 Data Center Virtualization Challenges

Virtualized data centers come with their share of challenges. You can address each one with a combination of practices and tooling, as a virtual data center does not run itself.

1. Potential Performance Issues

The advantage of virtualization, which is the ability to run multiple VMs on a single device, is also a potential problem. Shared CPU and RAM can only handle such much demand until it slows down or crashes.

2. Orchestration and Monitoring

A virtualized data center environment often comprises many different virtual machines inter-operating with one another. It can be challenging to orchestrate workflows that require more than one VM to complete, especially as operations scale up or down.

3. Vendor Lock-In

Setting up a virtualized data center can be a balancing act between selecting a single vendor that can handle most of the processes and becoming overly dependent on that vendor.

Some vendor dependency is unavoidable, but there are ways to reduce restrictive setups. APIs and standards can help.

4. Licensing

You have to pay close attention to software licensing in a virtualized data center. Otherwise, you can get surprised by unexpected software costs, for example. Make sure you’re clear on whether software is licensed per VM or per CPU, and so forth.

Alternatively, watch out for configuring systems in ways that put you out of compliance with licenses, as this can also create liability and unexpected costs.

Supporting Data Center Virtualization Services from Park Place Technologies

If your data center environment is virtualized or you are at least considering the change, Park Place Technologies can be your partner at every step of the way.

Our third-party hardware maintenance service provides support for the underlying hardware that is required for virtual data centers, so if something ever goes wrong, we’ll be there to fix it. If you are looking for something more, like management of your virtualized instance, our IT infrastructure managed services can optimize your data center performance and handle any ongoing updates and patches. This allows you to focus on big initiatives instead.

If you are looking to set up a virtualized data center, you can also use Park Place Technologies to source the equipment with our hardware division. What’s more, we can even handle installation through our IT Professional Services.

Contact Park Place Technologies to learn more.

 

Phil Godfrey headshot - Park Place Technologies Solutions Architect

About the Author

Phil Godfrey,
Phil Godfrey is a highly esteemed Solutions Architect at Park Place Technologies. With over 25 years of relevant experience, Phil is helping craft modern technology solutions for the IT industry.