How do cloud computing and virtualization technology relate in terms of resource utilization?

The relationship between cloud computing and virtualization technology is deeply interconnected, particularly in how both contribute to improved resource utilization and cost reduction. Virtualization allows multiple virtual instances to run on a single physical server by partitioning its resources, which enhances the efficiency of hardware usage. This means that instead of one application being run on one server, several applications can be hosted on the same hardware, leading to better resource allocation.

Cloud computing leverages this virtualization technology by providing resources as services over the internet, which allows for dynamic scaling and more efficient use of IT resources. This means organizations can easily increase or decrease their resource usage based on current needs, leading to optimal utilization without the need for significant investments in physical infrastructure. As a result, the combination of both technologies creates a more agile and cost-effective environment for deploying IT solutions.

By utilizing virtualization within cloud computing, organizations not only maximize their resource utilization but also achieve cost savings through reduced hardware spending and optimized operational efficiency. Thus, the correct answer reflects the synergistic benefits of both technologies in enhancing resource utilization and lowering costs.