Virtualization and Cloud computing are simply platforms and operational models respectively. . Virtualization is fast emerging as a game-changing technology in the enterprise computing space. What was once viewed as a technology useful for testing and development is going mainstream and is affecting the entire data-center ecosystem.Virtual machines by nature are designed to dynamically adjust to workloads .For security to really work in those kinds of environments, the controls need to be just as dynamic. The key technology is virtualization. In addition to some amazing cost savings and goodness for the environment, virtualizations ability to separate the OS and application from the hardware give it ideal properties to best deliver these on-demand cloud services. " With the increased penetration of virtualization and cloud computing, the technology is well out of the concept stage and into fruition. One thing to bear in mind, however, is that although virtualization and cloud are often tied together, they are not necessarily fused. In this paper we have discussed all aspect of virtualization and cloud computing and the dependence of both on each other. and Why does virtualization matter when building or selecting cloud services

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