Obligatory: http://xkcd.com/566/

Wow, Godwined already. Only at Slashdot can an article about a computer manufacturer and a supermarket chain get godwined so quickly.

Yes and no. As I said before a server typically runs at 5%-15% utilization. So if you want to get the most out of your hardware without virtualization, you'd need to run the equivalent of 6-20 servers' worth of applications on there. So that means that for example you may have a domain controller, a print server, a file server, an IIS server, an Apache server, a Tomcat server, the backup server, etc. all on one box. So if the backup server isn't doing anything and you want to install a patch and reboot it, you now bring down all of those other services, or you have to wait until off hours to do it.

Yes, poorly written code and custom configuration is a good reason to go to virtualization, but even properly written software works better when a server is isolated for one or a few select purposes, in the sense that you won't effect other systems when you need to be brought down.

Because for the most part, most servers don't run anywhere near full capacity (and if they do, then they are probably not good candidates for virtualization, except possibly for high availability purposes which I will go over in the second paragraph). I forget the study but I read once that on average a typical server sits at 5-15% utilization. So the idea behind products like VMware ESX is that if you need 5 unique servers, instead of buying 5 servers at $5,000 a piece, you buy 1 server for $5,000 + 1 $5,000 VMware license, and run the 5 virtual servers on that. So you spend $10,000 instead of $25,000, and your footprint is 1/5th of what it was before, meaning less racks, less cooling, less power, etc. And the numbers I gave are very conservative. A lot of people do 10-20 VMs per server easily.

So cost, power, and cooling issues aside, there are other issues. In a typical server environment, if a physical server suffers from a catastrophic hardware failure, that server is down until someone can walk over and swap the hardware. With VMware, if a VM is running on a server and that server fails, the VM is cold booted on another ESX server automatically, and is typically up in 30-60 seconds. With the newest release of ESX server, called vSphere, they take it a step further. You can optionally choose to have A VM mirror itself on to another physical ESX server. So in the event of a hardware failure, the VM keeps running on the mirrored host. And then, it becomes the primary VM and sets itself up to mirror automatically on another ESX server. So you have ZERO downtime and the app re-mirrors itself. These are just some of the many useful features in VMware.

And no, I do not work for VMware. I am a contractor for the Air Force and over the past 2 years I have converted almost 200 physical servers to VMs. We are a relatively small program, but our projections show that we will save $2,000,000 over 10 years just on the cost of servers (and yes, i have added in the cost of VMware licenses and support into that equation), and that doesn't even account for power and cooling savings. We've gone from almost 200 physical servers distributed over 7 full racks racks down to 28 servers in 2 racks (2 racks only because they are two separate facilities. Each rack only contains a single HP c-class chassis)

I think the real question is, how can you NOT understand the fuss around VMs?