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A virtual data center is a pool or collection of cloud infrastructure resources specifically designed for enterprise business needs. The basic resources are the processor (CPU), memory (RAM), storage (disk space) and networking (bandwidth). It is a virtual representation of a physical data center, complete with servers, storage clusters and lots of networking components, all of which reside in virtual space being hosted by one or more actual data centers.
A virtual data center is a product of the Infrastructure as a Service (IaaS) delivery model of cloud computing. It can provide on-demand computing, storage and networking, as well as applications, all of which can be seamlessly integrated into an organization's existing IT infrastructure. The premise of the virtual data center solution is to give organizations the option of adding capacity or installing a new IT infrastructure without the need to buy or install costly hardware, which takes up additional manpower, space and power. The whole data center infrastructure is provided over the cloud.
This is one of the greatest benefits of cloud computing: to allow relatively small organizations access to IT infrastructure in the form of a virtual data center without spending millions of dollars in capital in order to construct an actual data center. They only need to pay for the resources that they use, which allows for great flexibility and scalability.