Storage virtualization is a method of combining available storage space in physical hardware into software-defined storage which is accessible from any endpoint. Virtual data storage, in contrast to dedicated disk arrays, is adaptable, and offers greater capacity utilization and a lower chance of running short of space. It also eliminates redundancies in traditional hardware and reduces upfront costs and the time spent on upgrading and deploying a storage systems.

Storage virtualization is either host-based or network-based. Simple storage devices, like single hard disk drives do not offer any type of virtualization, but more advanced RAID arrays serve the same purpose: they provide multiple physical disks to servers as a single device stripping and transferring data across them. This approach offers the advantage of improved I/O performance and also a simpler diagnosis and troubleshooting.

File virtualization focuses primarily on the NAS problems of location independence, through eliminating the dependence on the physical directories or file systems. This allows enterprises to optimize storage and server resources, and conduct non-disruptive data migrations.

There are two types of virtual storage solutions such as VDRs (virtual data rooms) and cloud storage. Virtual data rooms (VDRs) are utilized by companies to simplify their due-diligence processes, fundraising, mergers and acquisitions or collaboration in a secure environment. They are usually accessible 24/7 and offer several tools to streamline project management, tracking users, and data collection. Contrary to this, a cloud storage service allows data to be stored remotely in the cloud. This is scalable, however, users have to entrust their the data to a third party which could raise privacy concerns.