Virtualization and Its Role in Business

Abstract

A new management trend of the global information technology (IT) application—virtualization—has appeared in contemporary management. Virtualization is a process of enterprise transformation (using IT) that allows breaking through various limitations of organizational constrains. Virtualization changes dramatically the image of business, especially of small and medium enterprises (SMEs); by adopting the concept of virtualization, they can become fully competitive and may effectively operate in the global market. Barriers of scale between SMEs and large organizations disappear. This new type of organization is often called in the literature a modern organization or virtual organization. Organizations of this type have an effective decision-making process and function based on economic criteria. Consequently, their opportunities to grow and compete in the global market are greater than for traditional SMEs. Hence, the thesis: virtualization allows individual organizations to enter strategic cooperative alliances with other similar businesses. Such virtual organizations have a competitive position in the global market.