Virtualisation is the transformation of hardware into software to create a functioning virtual machine with its own operating system, applications and data storage. Virtualisation is the name commonly used to describe the use of technology to provide virtual or abstract resources in the information, communication and technology ("ICT") sector.

The term 'virtualisation' is a broad concept and dates back to the IBM mainframe computers in the 1960s. These days virtualisation can refer to any of the following:

  • Virtual machines are virtual or abstract computers that execute programs like a physical computer. Virtual machines allow for the sharing of the underlying physical machine.
  • Application virtualisation describes the encapsulation of an application from an underlying operating system to improve portability and compatibility of applications. The application is separate from the operating system and is not installed on the operating system, however it executes as if it is installed on the operating system.
  • Storage virtualisation refers to the process of providing virtual or abstract storage separate from physical storage.
  • Network virtualisation is the process of creating virtual network functionality through the use of hardware and software.
  • Desktop virtualisation is used to describe the situation whereby a desktop operates off a remote server, so that all programs, application and data are stored centrally on a remote server.
  • Data virtualisation is a concept used within cloud computing, grid computing and business intelligence systems to refer to the accessing of data contained in various physical locations without regard to such physical locations or structures and it is the process of combining unconnected data silos into a single data source for use by consuming applications.

Why is ICT virtualisation good for the environment?

The ICT industry uses vast amounts of electricity. As a result of the concerns as to climate change and the drive to cut carbon emissions there is increasing activity, including regulation, in the ICT sector to reduce its carbon footprint. Many ICT organisations will fall within the UK's CRC Energy Efficiency Scheme thresholds1. The EU Code of Conduct on Data Centres Energy Efficiency2 requires a data centre operator to operate their data centre more efficiently and continually strive to reduce their carbon emissions.  

Virtualisation is seen as being good for the environment as it allows for business efficiency, reduced business costs and due to reduced energy demands, reduced carbon emissions. Virtualisation enables organisations to meet business and legislative demands in a cost effective way, without the need to purchase vast amounts of hardware. This in turn means less hardware is being manufactured, transported or disposed of in landfill sites.

Many computer servers run a single application and operate at an inefficient capacity, some figures3 suggest as low as 20% capacity. Server virtualisation consolidates multiple servers for a single more efficient server running multiple applications and at greater capacity. This creates power savings, reduces the requirement for power from the grid and the use of less hardware frees up floor space in the data centre.

Running PC software on a thin-client display as a virtual machine is cheaper and more energy efficient than running individual desk top PCs. They also help reduce cooling costs as less heat is produced by a virtual PC.

In any storage area network it is common to find that a great deal of storage capacity is allocated but unused. Virtualised storage allows a business to store data more efficiently and reduce power consumption. It also means that less materials and transport is required.

Legal and contractual issues to consider when undertaking an ICT virtualisation program

Organisations moving from a physical to a virtual model will need to undertake a due diligence to ascertain the additional software required to create a virtual environment. The IT team and the legal team will need to review existing software capabilities and licences to understand how these can be used or updated to operate in a virtual environment.

Where an organisation is using a third party to provide the virtual services, the organisation will need to consider its ability to transfer its existing software licences to the third party provider. It is not unusual to find restrictions in the various licences restricting the transfer to third parties, requiring the licensor's consent or the payment of additional charges.

Close attention will need to be given to service levels and the impact a virtualisation program will have on the availability of the services. A server operating at 20% capacity in respect of single function is less likely to suffer down time as opposed to a server operating at 80% capacity in respect of multiple functions. Therefore, bundling mission critical functions and non-mission critical with fail safe back-ups on the mission critical is more sensible than mixed bundling for the sake of it. The use of service credits may assist to ensure compliance with any contractually agreed service levels.  

Security will be a top priority, particularly in the area of desktop virtualisation, potential disadvantages include lack of privacy, system autonomy, the possibility of system wide security breaches and data loss.

Effective contract governance and service management procedures will need to be put in place, as is the case with any large services or outsource scenario, to ensure that the parties are communicating problems and have available procedures to deal with them.

In addition, for any large scale project involving business critical data it is essential that appropriate business continuity and disaster recovery procedures are put in place and are available during the implementation, operation and exit stages.

In respect of virtualisation projects involving the central storage of data, it is essential that an organisation considers trans-border data flows and the territorial location of the stored personal data and whether or not the transfer of personal data to third countries is permitted under its data protection rules.


Virtualisation can help an organisation reduce its costs and its energy demand. Vitualisation means that less hardware is required which in turn means a reduction in its manufacture and transport and disposal of such hardware. Looking forward, the focus might be on software code. Writing and processing software code does of course also use electricity. With the development of larger computer memory and greater processing power, software code is becoming longer and more detailed, this in turn means computers use more energy to process the software and the many applications found on the computer. So although one issue is being solved by the use of virtualisation technologies another is created in relation to the complex software codes that are now being written and the energy that is then needed to read these.