Throughout my career I've been looking to consolidate SQL Servers when I find them. The typical employer I've had usually grows their IT infrastructure over time and many projects look like this:

• Build or buy a software package
• Buy a new server
• Install SQL Server and one database for the application

Over time this means I find lots of individual servers running at much less than full capacity. That's something that DBAs like, because it means that we can handle the inevitable spikes in resource usage that our workloads will encounter. However that's not what the rest of the business, especially the financial management, wants. Underused resources mean money that isn't spent well.

As a result, I've often looked to consolidate instances where possible. Often I let an instance run by its own hardware for a period of months, perhaps even a year, during which I can get a good idea of what level of resources the database and application require. Once I have that, I try to match up the needs with an existing SQL Server that might be underutilized by at least that amount of resources. Typically I'm looking at RAM and CPU since disk resources can often be transferred to a new piece of hardware. It's not quite as simple as it sounds as I also need to look at workload patterns and potentially match up instances whose workload peaks occur at different times.

I've successfully consolidated many instances this way, often reducing the amount of physical hardware in data centers substantially. As hardware cycles turn over and newer machines are purchased, I can usually repeat the process again and again. The advent of virtualization has made this even easier as bad guesses can usually be reversed or corrected by moving the database to a different instance.

I suspect that virtualization will become more important in the future, especially as licensing changes in SQL Server make it much more expensive to add the ad hoc instance on its own hardware. I'd encourage you to plan on consolidating new databases from the beginning to ensure that your organization gets the most performance out of the hardware that it has purchased.