There are plenty of people looking to try and deploy virtualization in their environments, and for the most part I think this is a good strategy. It results in more efficient use of resources, and it can make reduce the space needed for your data center. However there are also many caveats that you need to consider before moving a database server.
I found an article recently in the paper copy of Information Week (yes, I get some things in paper) that talked about the NYSE investments in new data centers. It mentioned that they employ virtualization., but this quote is very telling. It says that they "keep the number of virtual machines low rather than cramming VMs in to utilize every CPU cycle." That's good advice for any system, but probably especially for database servers that you might be considering for virtualization.
SQL Server can work well in a virtual environment, and the fact that the NYSE, a company that is incredibly speed and performance oriented, is using virtualization is a good sign. It means that there must not be as much of a performance penalty on new virtualization software as some people think.
There's another good quote as well: "Any system sensitive to latency runs on a lightly virtualized or non-virtualized server." That's one that I might also pass along to any sysadmins or managers that want to treat SQL Server like any other system being virtualized.
Steve Jones
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