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Virtualization Tax

Definition - What does Virtualization Tax mean?

Virtualization tax refers to the perceived performance loss of virtual environments as opposed to physical equipment. The term applies to virtual infrastructures, especially those deployed within cloud computing. This term has also been applied to the use of additional licensing fees by virtualization providers to cover the costs of maintenance on underlying equipment.

Techopedia explains Virtualization Tax

Some have argued that the increased complexity involved with adding a virtualization layer to computing comes at a cost, known as “virtualization tax.” The benefits of flexible, scalable infrastructures may be outweighed by latency and performance issues that arise in the cloud computing environment. In some cases, users of virtualization or cloud services have even abandoned them and returned to traditional physical infrastructures with dedicated hardware.

The price-to-performance ratio becomes a major factor for these dissatisfied customers. Virtualization and cloud computing have marked a dramatic shift in the way IT services are delivered. Considerable research led to workable solutions for creating an isolated virtual computing environment. But the quest to make virtual computing a commodity has met with some pushback. Returning to “bare metal,” the more reliable managed hosting environment, remains an option.

Virtualization tax has also been used to describe the way additional fees may be imposed on customers to account for support that might be required on another vendor’s equipment. Complicated pricing schemes may mask the virtualization tax, or software providers may be reluctant to discuss its inclusion. Customers may be required to purchase licensing per processor, or they may even be asked to resolve the issues themselves.

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