I should have been clearer. I didn't quite catch the idea that you were planning to take existing hardware, use it for a virtual server, and then put SQL (and other servers?) on top of that.

Lutz is quite correct, your performance will likely suffer. How can you expect it to improve or even remain the same if you are running additional software on the same hardware? The HyperV or VMWare software incurs overhead. Hardware abstraction is not free.

One thing our consultant was clear with us about was to buy and build sufficient resources (ESX servers, RAM and SAN) to be larger than our typical load requirements would suggest. That way we can take down one of the ESX servers and all of our host servers will first migrate seamlessly to the other ESX servers. Users don't even know it happened. It's remarkable.

I would be very wary of putting an 800-pound gorilla app. such as you described onto a virtual setup, especially a poorly behaved gorilla. I'm a little confused. Your SQL server you describe as "our SQL Server which is quite powerful, more than needed actually." But you describe the primary SQL application as "Needless to say, the whole thing looks like a bad joke and is slow as hell." If throwing more hardware at your current application hasn't enabled it to function properly, it won't get any better as a virtual server. This is a classic example of an application in need of re-coding.

We've been very successful with ESX, and it has exceeded our expectations. We have linux, Windows, and Netware servers all running side by side. We deploy test servers from a template in 15 minutes, run them for as long as we need, then simply delete them. But we don't put big, resource-hungry things like email on it.

Rich