What does virtualization technology allow in cloud computing?

Virtualization technology plays a pivotal role in cloud computing by enabling the abstraction of physical hardware resources, allowing multiple virtual machines to run on a single physical server. This capability significantly reduces the need for physical hardware, leading to decreased costs associated with purchasing, maintaining, and powering numerous physical servers. By efficiently utilizing computing resources, virtualization can maximize server capacity and promote better resource allocation, which in turn helps organizations optimize their IT infrastructure spending.

In essence, the ability to create virtual environments reduces reliance on physical servers, streamlining operations and minimizing hardware expenditures. This approach not only makes cloud services more economically viable but also enhances scalability and agility in deploying applications and services. The other options, while relevant to various aspects of IT and cloud environments, do not directly stem from the core functionality provided by virtualization technology.