Given the technology's upside, it's easy to see why. Server virtualization divides a physical server into multiple virtual machines, each of which can run its own isolated operating environment and applications. That means less hardware, reduced power and cooling costs, and extended datacenter life. The ability to provision a new server simply by loading a virtualized image onto existing hardware not only saves IT management budget, it makes the business more agile.

Make no mistake; commodity server virtualization is a relatively young technology. The market offers multiple solutions but few standards. Consensus among customers is that it works as advertised and is not difficult to implement, but efficient management and migration remain ongoing challenges. Nor is virtualization appropriate for every application. Applications that hog I/O and memory resources, such as large database deployments and Microsoft Exchange, often are not good candidates for sharing server hardware with other applications, even in a virtual environment.

Customers that have taken the plunge are typically in the early phases of virtualized infrastructure: After initial testing, applications are virtualized gradually as servers are retired, applications are upgraded, or IT moves toward a service-delivery model. Despite a cautious start, however, the common theme among these customers is great enthusiasm for the genuine benefits virtualization can bring.

A lot less hardware

One of the key incentives driving the market for virtualization is a desire to reduce costs associated with server hardware, both for limiting new purchases and reducing the total portfolio of equipment in the datacenter. For Capital One, a diversified global financial services company, virtualization provides a key component of a three-year IT consolidation strategy and transformation to an on-demand service delivery organization. This transformation is well into its second year.