Data virtualization is an approach to data management that allows an application to retrieve and manipulate data without requiring technical details about the data, such as how it is formatted at source, or where it is physically located, and can provide a single customer view (or single view of any other entity) of the overall data.

Unlike the traditional extract, transform, load ("ETL") process, the data remains in place, and real-time access is given to the source system for the data. This reduces the risk of data errors, of the workload moving data around that may never be used, and it does not attempt to impose a single data model on the data (an example of heterogeneous data is a federated database system). The technology also supports the writing of transaction data updates back to the source systems. To resolve differences in source and consumer formats and semantics, various abstraction and transformation techniques are used. This concept and software is a subset of data integration and is commonly used within business intelligence, service-oriented architecture data services, cloud computing, enterprise search, and master data management.

The defining feature of data virtualization is that the data used remains in its original locations and real-time access is established to allow analytics across multiple sources. This aids in resolving some technical difficulties such as compatibility problems when combining data from various platforms, lowering the risk of error caused by faulty data, and guaranteeing that the newest data is used. Furthermore, avoiding the creation of a new database containing personal information can make it easier to comply with privacy regulations. As a result, data virtualization creates new possibilities for data use.

Building on this, data virtualization's real value, particularly for users, is its declarative approach. Unlike traditional data integration methods that require specifying every step of integration, this approach can be less error-prone and more efficient. Traditional methods are tedious, especially when adapting to changing requirements, involving changes at multiple steps. Data virtualization, in contrast, allows users to simply describe the desired outcome. The software then automatically generates the necessary steps to achieve this result. If the desired outcome changes, updating the description suffices, and the software adjusts the intermediate steps accordingly. This flexibility can accelerate processes by up to five times, underscoring the primary advantage of data virtualization.

However, with data virtualization, the connection to all necessary data sources must be operational as there is no local copy of the data, which is one of the main drawbacks of the approach. Connection problems occur more often in complex systems where one or more crucial sources will occasionally be unavailable. Smart data buffering, such as keeping the data from the most recent few requests in the virtualization system buffer can help to mitigate this issue.

Moreover, because data virtualization solutions may use large numbers of network connections to read the original data and server virtualised tables to other solutions over the network, system security requires more consideration than it does with traditional data lakes. In a conventional data lake system, data can be imported into the lake by following specific procedures in a single environment. When using a virtualization system, the environment must separately establish secure connections with each data source, which is typically located in a different environment from the virtualization system itself.

Security of personal data and compliance with regulations can be a major issue when introducing new services or attempting to combine various data sources. When data is delivered for analysis, data virtualisation can help to resolve privacy-related problems. Virtualization makes it possible to combine personal data from different sources without physically copying them to another location while also limiting the view to all other collected variables. However, virtualization does not eliminate the requirement to confirm the security and privacy of the analysis results before making them more widely available. Regardless of the chosen data integration method, all results based on personal level data should be protected with the appropriate privacy requirements.

Some enterprise landscapes are filled with disparate data sources including multiple data warehouses, data marts, and/or data lakes, even though a Data Warehouse, if implemented correctly, should be unique and a single source of truth. Data virtualization can efficiently bridge data across data warehouses, data marts, and data lakes without having to create a whole new integrated physical data platform. Existing data infrastructure can continue performing their core functions while the data virtualization layer just leverages the data from those sources. This aspect of data virtualization makes it complementary to all existing data sources and increases the availability and usage of enterprise data.^{[citation needed]}