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Storage virtualization abstracts the space available in physical hardware into software-defined storage that can be accessed by any end-user device. It lets multiple storage devices appear as a single monolithic volume, and simplifies the management of data without the need to predict long-term storage needs and pay for additional capacity upfront.

Virtualization can be accomplished in two ways: host-based or network based. Host-based virtualization (typically employed in HCI systems and cloud storage) utilizes software to control traffic. The host or hyper-converged systems made up of several hosts, present virtual drives to guest computers with any configuration, whether they are virtual machines in enterprise environments, PCs which connect to server files, or servers that use cloud storage to store data. The host uses software that converts the logical addresses of each block of disk data into an offset within the logical drive.

Network-based virtualization takes an entirely different approach, by shifting the complexity of the storage controller to a layer over the virtualization hardware. Often this requires additional components such as a network switch to take on the additional I/O burden however it is a great way to reduce costs and boost performance.

The layer above the virtualization hardware provides the capability to perform backup and recovery functions, without being affected by the virtualization. It can also make it easier for IT professionals to resolve issues remotely which can help accelerate the resolution time. In addition, it helps in scalability by removing dependence between the location of the files accessed at the file level and the location they are physically stored on physical disks. This will help in optimizing storage usage as well as server consolidation and performing non-disruptive file transfer.