Server virtualization technology has existed for a number of years, providing a viable alternative to deploying physical hardware configured as servers. Physical hardware running server operating systems provides low levels of resource utilisation, typically running with as little as 15-20% utilisation.
This has made the costs of procuring and maintaining physical hardware expensive, especially considering the amount of space the hardware requires in a data centre, along with the accompanying costs consisting of power and cooling, the latter to offset the heat produced by the power hungry hardware components.
Server virtualization allows the physical servers to be deployed as virtual machines, reducing the amount of hardware needed. This reduces the space required in data centres, resulting in lower power and cooling costs, leading to an overall total cost of ownership.
So instead of deploying physical hardware such as a Hewlett Packard DL380 Server with an operating system such as Microsoft's Windows 2008 Server, the same physical server can be deployed with virtualization software which can then run multiple virtual machines which themselves run Microsoft's Windows 2008 Server operating system.
In this case a single physical device can run 5,10 maybe 15 or more virtual machines subject to having the increased processing and memory power to cope.
The leading vendors of server virtualization technology are VMware, Citrix and Microsoft. VMware ESX is the market leader, with Citrix XenServer