Small- and medium-sized businesses are turning to server virtualization in the cloud to optimize their IT practices while simultaneously driving down costs, according to a recent Fresh Business Thinking report.

In addition to storage and SaaS, server virtualization is one of the most popular cloud computing solutions sought by SMBs.

Internet-based SMBs, in particular, can benefit by cloud server and hosting solutions, the report states. By moving their websites to the cloud, these companies are afforded greater flexibility and cost efficiency than they typically would find with in-house solutions.

Additionally, the cloud enables businesses to handle fluctuating traffic better than on-site servers. During peak hours, an SMB can simply increase the bandwidth it needs to accommodate the higher traffic levels. When traffic levels have subsided, the SMB can limit its bandwidth capacity to save money.

"With cloud hosting the website owner has control over the size of the server and bandwidth," the report states. "When a website needs extra capacity the website owner simply and immediately scales the server appropriately - when they no longer need the extra capacity they scale back."

Businesses of all sizes are increasingly adopting cloud computing to improve their IT capabilities. According to a 2010 Gartner report, the global cloud service market will reach $148.8 billion by 2014.

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