Virtualization: Perspectives on the Future of Business

“Necessity is the mother of invention” — Plato

Few endeavors are as challenging and uncertain as attempting to predict the future. This article is my—not so humble—attempt to assess how businesses and companies will change over the next 20 years.

Until 2006, when Amazon began commercializing cloud computing, the term was known only to technology specialists. Companies like banks, insurance firms, airlines, among many others, maintained (and many still do) enormous IT departments with large budgets. These departments housed rooms filled with computers, cooling systems, dedicated internet connections, and system administrators responsible for maintaining hardware, software, and operating systems.

Today, nearly 20 years later, it’s hard to imagine a new company that would want to recreate the traditional IT model. But why is this the case? I identify several reasons, among which the following stand out:

Scalability and Elasticity: In the past, to meet demand during events like Black Friday and Christmas promotions, companies had to invest in IT infrastructure that remained 90% idle during the rest of the year, just to avoid losing sales on those specific dates. The ability to shift capital expenditures (CapEx) to operational expenditures (OpEx) by adopting a pay-as-you-go model—which allows scaling processors, memory, and other resources only when necessary—significantly improves business efficiency.

Moreover, performance-related issues can be easily resolved through remote configurations, providing a better user experience with lower risk. In terms of robustness, it’s possible to protect against cyberattacks, blackouts, and system failures by using high-availability systems. Regarding resilience, the system has the ability to quickly recover from problems.

Although all these functions could be performed in theory by internal IT teams, the crucial point is that they were not core activities for most companies and neither was it, their area of expertise. Conversely, these tasks are the central focus of cloud computing companies, which can execute them with higher quality by leveraging economies of scale, attracting the best talent in the market, and acquiring top-tier hardware and software products.

And what does this have to do with the future of business? I believe that this migration from internal IT to cloud systems—that is, virtualization—is a much larger transformation that extends to all sectors of society. Elasticity, the conversion of CapEx to OpEx, performance, robustness, resilience, the struggle to minimize idle resources, and above all, the focus on core business are essential needs for companies of all sizes in virtually every industry.

Let’s change  perspectives: instead of thinking in terms of “Processing,” “Memory,” “Bandwidth,” or “IT Staff,” consider these elements as flexible resources. Imagine companies that still purchase vehicles to transport their products, maintain warehouses to store them, and hire employees for logistics. Now envision all this as an on-demand service—like an “Uber” for available resources allocated to your company only when necessary, with greater flexibility and filtering options.

Until now, the process of virtualizing everything was limited by technological issues. It’s vastly different to find a car available to take you from point A to point B than, for example, to locate a trustworthy driver to transport million-dollar cargo, flammable materials, or even a specialist in distribution channels and franchises specializing in construction materials.

With the advent of artificial intelligence capable of analyzing the history of a resource—such as an employee—and its thousands of attributes (e.g., language proficiency, emotional intelligence) to make a precise match with the challenge at hand, we can achieve optimal resource allocation that was previously only theoretical but is now a reality.

Imagine transforming virtually all of a company’s fixed costs into variable ones, with all resources elastic and available on demand. Some might think this already exists through outsourcing, but we’re not talking about the same thing. Allow me to explain.

The traditional relationship between a supplier and its client can improve various aspects of the business, but it’s still not virtualized. For example, if you need a lawyer specialized in health insurance and the firm you work with doesn’t have one, it’s up to you to define the necessary attributes—on a subject you might not fully understand—search online, interview candidates, request and evaluate proposals, compare them, and decide. The result will be sufficient but far from exceptional or optimal.

Now imagine that artificial intelligence already has the answer ready for you. It can analyze thousands of variables about your business and all the professionals available in your city, state, country, or even globally, making a precise match in real time.

AI is also capable of checking the specialist’s availability, preparing the service scope, negotiating the price on your behalf, drafting and signing the contract, measuring results, requesting clarifications when necessary while presenting everything clearly, and taking actions based on your choices. This automation and optimization of the process enable such efficient resource allocation that it would make Tony Stark retire J.A.R.V.I.S.

For this to happen, real-world resources need to have their digital twins. This is not just a trend or a mere vision of the future but possibly one of the greatest business opportunities of our generation.