Storage virtualization

Storage virtualization refers to pooling of storage resources to provide a single large storage space, which can be managed from a single console. Storage virtualization offers administrative benefits such as managing backups, archiving, on demand storage allocation, and so on.

For example, Windows Azure VMs by default contain two disk drives for storage, but on demand we can add any number of disk drives to the VM within minutes (limited to the VM tier). This allows instant scalability and better utilization since we are only paying for what we use and expand/shrink as per demand.

This is what storage virtualization looks like: