It depends on who you ask, but in general, virtualization is seen as complementary to cloud computing but not a necessity.

"Virtualization is one of a number of useful technologies for cloud computing. Not all applications of cloud computing require the use of the use of virtual machine technology," according to Dan Kusnetzky, lead analyst of the Kusnetzky Group. "They may, however, use virtual access, application virtualization and/or storage virtualization."

Cloud computing is more of a buzzword to Subbaraman (Subba) Iyer, vice president of i2m Management Services, a major South-east Asia project-management firm.

"I see that there's very little connection between cloud computing and virtualization, though they have common underlying drivers," Iyer says. "Generically speaking, the tern 'cloud computing' is just an alternate solution that doesn't use the in-house data center or any vendor specific hosting resource. It is a virtual huge infrastructure where both computing and storage resource is available on a pay-as-you-go on-demand basis. The compelling benefit is in its scalability and the ability to access an application anywhere."

Web strategies and Internet services consultant Errett Cord, on the other hand, thinks the two approaches complement each other.

Virtualization allows user companies to reduce the number of servers being used; cloud computing and virtualization are two parts of the same effort to create a network setup that's both efficient in its use of resources and redundant in its failover and disaster-recovery preparedness.

Middleware companies, such as Boomi and CohesiveFT will significantly bridge the gap of corporate software applications to the cloud by building virtualized systems that run from cloud computing platforms.

Walt Disney business analyst Steven Algieri calls virtualization "the biggest single reason the cloud gives you scalability." .

"Most of the services you need to scale quickly [in a server environment] are the client-facing services," he says. "A common example would be a web server. If the web server is running a database driven content management system [where] all the actual data is in a large database on a separate server, then having a static configuration of the front-end web server makes it trivial to spin up new instances. All that's needed is a simple script inside to obtain a a few custom details [such as the] IP address and database address.

"This is how Amazon EC2 works," Algieri says. "You create a virtual machine image, and Amazon will then happily spin of as many instances off as you need. Using a service like RightScale then gives the ability to manage these instances.