Few technologies have become a fundamental part of the data center as quickly as server virtualization. That's because the basic value proposition is so easy to grasp: When you run many logical servers on a single physical server, you get a lot more out of your hardware, so you can invest in fewer physical servers to handle the same set of workloads. It almost sounds like found money.
The details, of course, are more complicated. The hypervisor, a thin layer of software upon which you deploy virtual servers, is generally wrapped into a complete software solution that incurs some combination of licensing, support, and/or maintenance costs (depending on which virtualization software you chose). And you very likely will need to upgrade to server processors that support virtualization.
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On the other hand, reducing the number of servers yields indirect cost savings -- less space to rent, less cooling to pay for, and of course lower power consumption.
Even more compelling is virtualization's inherent agility. As workloads shift, you can spin up and spin down virtual servers with ease, scaling to meet new application demands on the fly.
The path to rolling out a virtualized infrastructure has its share of pitfalls. You need to justify the initial cost and disruption in a way that does not create unrealistic expectations. And you need to know how to proceed with your rollout, to minimize risk and ensure performance stays at acceptable levels.