Virtualization improves resource utilization in data centers by allowing multiple virtual machines to run on a single physical server. This process enhances efficiency by maximizing hardware usage and reducing energy consumption. Virtualization facilitates easier management of resources, allowing organizations to dynamically allocate computing power, storage, and memory based on current workloads. Additionally, it enables more effective disaster recovery solutions and simplified testing of applications in isolated environments. Overall, virtualization contributes to lower operational costs and more agile responses to changing demands, making it an essential strategy in modern data center management.