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Virtualization is a technique that enables multiple virtual resources to run on a single physical system, separating hardware from software and providing isolation between workloads. It encompasses virtual machines, containers, and related abstractions. In enterprise and cloud environments, virtualization facilitates flexible allocation of compute, storage, and networking resources, simplifies management, and improves utilization of hardware.

Key components include a hypervisor, which creates and runs virtual machines. Type 1 hypervisors run directly on hardware, delivering high performance and security; Type 2 hypervisors run within a host operating system. Modern processors provide hardware-assisted virtualization features, such as Intel VT-x and AMD-V, to reduce virtualization overhead and improve isolation.

In addition to full virtualization with VMs, containerization provides OS-level virtualization where containers share a kernel but run isolated processes, enabling lightweight, fast deployment and scalability. Storage and network virtualization further abstract resources, enabling virtual networks and storage pools independent of physical devices.

Common use cases include server consolidation, disaster recovery, development and testing, and cloud computing. Benefits include improved hardware utilization, easier workload migration, scalable provisioning, and isolation for security and reliability. Challenges include potential performance overhead, licensing considerations, complexity of management, and security risks from multi-tenant environments.

The virtualization field has evolved from early mainframe time-sharing and bare-metal hypervisors to widespread data center adoption and cloud services. It remains central to modern IT infrastructure, often complemented by software-defined storage, software-defined networking, and container orchestration platforms.