Why are virtual data centers right for startups and tech companies?

Most startup founders are often too excited to get their idea off the ground. They worry about their product 24/7 because they are passionate. What most of them are always forgetting is to create the right server architecture to support their product and the user demands.

As a startup founder myself, I made that mistake. I quickly realized how vital it is to your product survival to have a scalable and well-defined server architecture even though it’s not your primary product.

One of the best solutions for startups who are growing quickly is to use all-in-one server services like AWS (Amazon Web Services), that manages virtual data centers for you.


What is a virtual data center?

A virtual data center is one of the product offers by companies who sell Infrastructure as a Service (IaaS) based on a cloud computing model – like AWS. The main premise of virtual data center solutions is to give companies the flexibility of changing the server capacity/storage and performances they need based on their real user demand without the need to buy more costly hardware.


How do they virtualize everything?

The data center virtualization process can be explained in 3 simple steps:

  1. Virtualize all compute resources in the data center by using a server management software like VMWare.
  2. Network and Security services also need to be virtualized and make them available to the compute layer for the on-demand consumption.
  3. Do the same for storage – Abstract, pool, and automate local and external storage into one single virtual data plate.

With all services now virtualized, startup founders can increase their resources utilization without changing or buying theirs hardware servers. This approach presents many advantages compared to the old physical data centers.

Data Center Virtualization process
Data Center Virtualization process


Virtual servers vs. old physical servers

For a startup founder or even a big tech company, using virtual servers compare to old physical servers make sense on multiple levels. Here are three benefits of using virtual servers:

  1. Less heat buildup – Heat dissipation in a data center is one of the biggest problems. The only way you can work around that is by using multiple servers, but to manage multiple servers, you need to virtualize them. When every server is virtualized, you’re using less physical servers, and by using less physical servers, you’re generating less heat.
  2. Reduce cost – By using virtual servers, you can better manage the servers performances. You can then reduce the number of hardware servers you have.
  3. Easier Backups – Not only can you do full backups of your virtual server, but you can also do backups and snapshots of your virtual machines at any moment of the day.


Conclusion for startup founders

Having the possibility to increase your server power at any moment depending on your user demands, it’s probably one of the most important technical things. Virtual data center and all-in-one server services like AWS offer more than an IaaS; they offer flexibility and adjusted performances as a service. There’s nothing more valuable than paying for what you really need for a startup and even for big tech companies.



  1. CentralColo. (2015). What Startups Need to Know About Colocation of Servers. [online] Available at: http://www.centralcolo.com/what-startups-need-to-know-about-colocation-of-servers/ [Accessed 7 Jul. 2017].
  2. Bluelock. (2009). What is a Virtual Datacenter? – Bluelock. [online] Available at: https://www.bluelock.com/blog/what-is-a-virtual-datacenter/ [Accessed 7 Jul. 2017].
  3. Judge, P. (2016). VMware puts cloud data center service on AWS . [online] DatacenterDynamics. Available at: http://www.datacenterdynamics.com/content-tracks/colo-cloud/vmware-puts-cloud-data-center-service-on-aws/97119.fullarticle [Accessed 7 Jul. 2017].
  4. TechRepublic. (2017). 10 benefits of virtualization in the data center – TechRepublic. [online] Available at: https://www.techrepublic.com/blog/10-things/10-benefits-of-virtualization-in-the-data-center/ [Accessed 7 Jul. 2017].
  5. VMWare. (2017). [online] Available at: https://www.vmware.com/products/datacenter-virtualization.html [Accessed 7 Jul. 2017].
  6. Sverdlik, Y. (2015). Amazon Wants to Replace the Enterprise Data Center | Data Center Knowledge. [online] Data Center Knowledge. Available at: http://www.datacenterknowledge.com/archives/2015/04/09/amazon-wants-to-replace-the-enterprise-data-center/ [Accessed 7 Jul. 2017].

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4 comments on “Why are virtual data centers right for startups and tech companies?”

  1. I am a big fan of using cloud providers to deliver applications to the market. High performance hardware is expensive, as is the environment needed to support it. Buying workstations for a development team is non-trivial, and adding in maintenance and support costs can consume a large portion of early funding which may be needed elsewhere.

    As COO of a startup building a mobile content delivery network in 2006-7, we decided to virtualize our environment and physically house it in one of the early large cloud provider environments. We ran VMware ESX for the hypervisor and experimented with VMotion to support dynamic relocation of executable images in flight. Our applications included a video streamer to optimize video delivery in terms of frame type/combination based on real-time feedback from mobile phones sampled on a 4 second interval, coupled with content library management, call detail record, etc. The various applications were run in virtualized servers.

    One key technical point that those working in development need to understand is that though virtualization isolates applications from the real environment in which they are running, the real environment may impact application performance. While some of the obvious parameters such as processor speed, type, memory, etc., come into play, some of the less obvious ones include CPU manufacturer, firmware revision and lower level features of the physical environment. Routers, switches, load balancers, and other components need to be understood in terms of operating system version, firmware, etc., as well. Troubleshooting can be very difficult when one has to trace a call path in execution.


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  2. I definitely agree with this. Since start ups do not have the knowledge of how fast they will scale, its for their own benefit to grow in an elastic infrastructure that can expand according to their need. They must put all their resources in their core business and not ‘accessories’ like a ‘cool state-of-art’ data center.

    However caution must be taken to ensure protection of the data. Legal aspects of data ownership must be settled beforehand. You cannot afford to hand in your ‘secret sauce’ to a possible competitor. Once that is settled, then it should be perfect to proceed in a virtual environment.

  3. Hi Raphael,
    Thanks for sharing your thoughts on using virtual data centres as a startup.

    I also believe that it is a huge benefit, that startups don’t need to invest a lot in own servers and can have a rather risk-free use of external providers since they now how much new customers costs.
    On the other hand, as mentioned during the talk, it makes start ups very dependent on that one providers since it is still very hard to change provider. This might not be something that a startup thinks about at the beginning but might be important when it reaches a more mature stage.
    Depending on the nature of the startup and the type of service provider privacy and data sharing might be a critical point as well but could be solved by using a hybrid system.

  4. Thank you for a nice article. I totally agree with you.
    I think benefits of virtual data centers apply to not only startups but also large organizations. When my team developed two new systems at MUFG, we had to spend half of budget on buying new data servers (including maintenance contract). Although I know “system down” is especially critical for banks, it was too expensive. I’d like to invest in user experience, not in data centers.
    I hope this will change soon.


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