In a time when it appears almost every business around you is moving toward virtualization and the cloud, it is important to review all the facts before making a final decision on your hosted solution. Does it make sense for you to jump on the virtualization bandwagon or stick with a tried and tested solution, the dedicated server? What are the pros and cons of both solutions so that you can make an informed decision when your boss asks for one? While it’s hard to to provide a blanket wide solution for all companies when it comes to virtualization, knowing some of the facts may help you decide what solution will be best for your growing business.

What is Server Virtualization

The actual concept of server virtualization has been around for years. Consolidate a number of physical servers onto a more powerful machine capable of handling the increased load. Since each physical servers was only using a small portion of the total CPU, Ram, and I/O, it makes sense to get more out of your hardware. Recent advances in software have also made the transition to virtualization less of a technology hurdle for many companies. But, like many things in this world, it isn’t always that cut-and-dry. You may find that only part of your infrastructure will benefit from server virtualization. Some server processes may even be hurt by virtualization. This article should help you understand why both technologies may still have a place in today’s IT world.

Virtualization and the Cloud – Pros and Cons:

For the sake of this article we are going to focus on the virtualization of a dedicated server using a software product. While some people may argue this isn’t a true cloud environment until some other factors are addressed, we will keep things simple here. Products that could be used to achieve virtualization might be VMWare, Virtuozzo, Xen/Citrix, Hyper-V, or any other flavor you might be comfortable using in a production environment. While each version has it’s own pros and cons, we will focus on the general idea of virtualization as a whole and what it can do for your business.

Pros of Virtualization:

  • Cost Savings – The obvious #1 reason to virtualize is to save money. This may be hardware, staff, or energy related savings. In a time when companies are cutting everything from paper to people, this is a very attractive technology that upper management is jumping on board with. A well thought out virtualization plan should result in lower equipment, power, management, and replacement hardware costs in theory. Many ask if this to good to be true? While nobody would argue that saving money is a good thing, is there a catch?. We all agree that a $50,000 Corvette and a $25,000 Honda Accord are both cars. The performance of one is going to be better but also more expensive. The point is that costs savings may come with a price….. performance (see cons below).
  • Administration Time – One of the main arguments for virtualization is the ease of managing the equipment and applications. Many of the virtualization products have advanced management tools that help you monitor and review information quicker across more servers. This can lead to smaller IT staffs, and less 3rd party software you have to learn. Less errors are likely when management is easier.
  • Disaster Recovery – Most virtualization software comes with a number of features that may increase server up-time for your environment when used correctly. In theory you can have one virtual server fail and it will come up instantly on another machine. Virtual load balancing if much less expensive than dedicated load balancing. Many packages also come with their own data backup solutions (snapshots) to protect data. It can be argued that the consolidation of all these elements into a single package keeps human error down, software costs down, and server up-time higher.
  • Easier IT Growth – With today’s advanced virtualization packages adding a new server or increasing ram, CPU, or hard disk is as easy as pressing a few buttons. The ease of deploying new servers can decrease the time it takes to launch new products and services.
  • Security – This one can actually be a double edge sword. We will address this as a con also in the article below. It makes sense that setting up a security plan for a virtual server environment is easier because you can focus on a universal security model. In theory it should be easier to manage security this way. . A more focused approach to overall security across fewer dedicated machines is easier than security for more hardware, right?
  • Migration of Legacy Applications – Many virtualization products come with software that helps you migrate applications from your older dedicated servers (Legacy) to new virtual servers. Once you have a virtual server in place you can also move each “slice” to upgraded hardware by simply dragging them onto another virtualized server. This means that upgrades to your environment can be much easier as long s you stay with similar virtualization products.
  • Green Factor – Let’s be honest, whether you agree with the green movement or not, the virtualization of servers does equal less hardware. While it can be argued that the newer blade servers actually use more power overall, in most cases we will be reducing our net power usage with virtualization.

Cons of Virtualization:

  • Performance – Yes, performance is not as good if you increase the workload a single machine must handle. While the virtualization hardware is getting faster and faster each year, you still have more resources being used with virtualization. When you have 8 virtual servers installed on a single physical server the performance takes a hit. You also are dealing with SANs and other devices for storage that can degrade your performance depending on your individual setup. Performance needs for an application should to be addressed on a case by case basis. Would I run SQL Server on a virtual slice if I had other options? It all depends on the results I’m expecting and the quality of service my customers expect.
  • Cost Of Licensing – Yes, we have this listed as a pro and a con. Even though you may save costs on hardware, the costs of the virtualization software and licensing may be high. Many packages have free starter versions, but they usually don’t come with important management packages or work good for enterprise users. The free versions may also have feature limitations like how many server cores you can use at once. Overall your software costs will usually increase with virtualization. You also have to treat each virtual server as a physical instance like before, so normal licensing costs for each virtual server stays about the same.
  • Single Point of Failure – We can debate this one for a long time. It all depends on how you have setup your individual environment. If you have 10 virtual servers on a single piece of hardware (no San) and that goes down, it won’t be pretty. If you use the tools built into the virtualization product as intended you should be able to prevent that scenariorio. I guess there is the old lesson about having all your eggs in one basket. While true, a good system administer can minimize most of these risks with virtualization. Minimizing these risks may require additional hardware like redundant physical servers and sans. This adds more equipment and cost which are the exact items you are trying to lesson.
  • Learning Curve – You have a college degree in network administration and feel very confident in your ability to manage a physical server with Windows 2008 installed. Now you have to move your entire hosted environment to a virtual setup with its own learning curve and software. Each virtualization package comes with it’s own set of rules and a 600 page instruction manual. It’s not easy to pick another solution up and just hit the floor running in a mission critical environment. Does this mean you should learn new technologies? No, but you should understand the risks of using something new when your current environment is working for you.
  • Security – Yes, this is another one that can be listed as a pro and a con. On the con side your virtual server might be on the same physical server as another company. This is especially true if you are using a hosting company on a cloud environment. If you are leasing cloud space from a hosting provider how are they protecting your data from the thousands of other people on the cloud. Do you have limitations on how you can implement security on the cloud? Is your server PCI Compliant where it is, and would it qualify for HIPAA compliance? These are just a few questions to ask yourself before making the change. The security of your virtual server depends on many factors and could complicate a few items when dealing with industry regulations.
  • Fun Factor Gone (Maybe) – Gone are the days of playing with physical hardware and servers. For some of us this was like waking up on Christmas morning and opening our presents. Today the IT administrator spends more time monitoring and managing software screens instead of looking at physical hardware. We are living in a virtual world now. While this is a pro for some, most of the IT folks I know would list this as a con.

Dedicated Servers – Pros and Cons:

With all the buzz about server virtualization today, why do most large companies still use dedicated hardware? Sure, every Fortune 500 company has virtual servers in use, but when it comes to their “meat and potatoes” services they tend to use physical hardware for their infrastructure. While the reasons are complex, the point we are trying to make is that there are still reasons to select a physical server over a virtual server. These reasons may also be more common than most think. Just like every new technology that has come and gone people will adapt and use what works best for them while others do it the old fashion way. What are some of the pros to keeping your physical dedicated servers:

Pros of a Dedicated Server:

  • Performance – #1 reason to stay on a dedicated server. Let’s face it…. A server that is running one application will be faster than the same server running multiple applications. Pretty simple right? It doesn’t matter how fast the server is, that statement will always be true. If I have to host a resource intensive SQL database application I want all the resources I can get my hands on. There are times when a virtual server cannot perform like a dedicated server and we all have to determine when that time comes. All things being equal the dedicated server wins on performance but may loose on efficiency.
  • Separation Of Services – Just like our government separates church and state, it makes sense to separate some of your important and powerful hosted services. You don’t want your entire business shutting down with a single failure. With dedicated servers we know that a single server failure rarely takes down everything. Virtualization increases the risk of a major event when you loose a single server. Many experts will argue that this statement isn’t true if you do things right. In fact, one of virtualizations selling points is the ability to load balance servers easily. I agree, but I also know that most of us make mistakes and may not always “do things right”. So separation of services could be a good thing for many different configurations.
  • Price? – I know what you are saying. The cost of buying individual servers is much higher than virtualizaztion, and the reason to virtualize is to save money. While I agree with this statement in part, we have to look at a typical real-world scenario. Today you can go to E-bay and buy a 1-2 year old Dell server for about $250. If your configuration only needs five of these servers then this solution might be less expensive than a new box capable of running a virtualization platform. A typical virtualization server might include Dual Quad Core CPUs and 64 GB ram. You may also have hardware and software licenses that you currently own. While the server running the virtualization may be faster, a slice of the total CPU may not be. So the cost of dedicated hardware could actually be less depending on your individual situation. A Fortune 500 company isn’t going to purchase their servers from E-Bay, but the ten of thousands of small or medium sized businesses with smaller needs may.
  • Security Of Data – I’m going to come at this one from more of a cloud hosting perspective. Is your company using a cloud hosting service provided by a national hosting provider? Is your data on the same physical device or cloud as your competitions? What happens if the hosting company goes out of business? What happens to the cloud’s data, your website? Where is the cloud’s data being stored? How quickly can you get it back or bring your business back online? Is your data secure and how does the hosting provider secure the cloud? These are all questions that businesses have to ask before they trust the cloud. In many cases you might have less control over the cloud than you would a dedicated server. You could host on your own private cloud and solve most of these issues, but then how many business have the resources to manage that?
  • Knowledge – You have years of knowledge managing your current infrastructure and have spent countless long nights with it. Everything is working right now without virtualization. If you go from 5 servers to a single server would you be saving 1000 trees and 2500 pounds of carbon emissions? In most cases the answer is no and if it isn’t broke don’t fix it. While you should never shy away from a technology because it requires you to think in a new way, you simply have to ask yourself if virtualization is needed. Working in a datacenter I have seen my share of companies migrate to a virtual environment and get lower performance benchmarks than the original setup. Not so sure if that is good ROI or good for their customers.
  • Freedom – Before virtualization came along we had a little more freedom and flexibility on how we build our servers. Sure, we might of had to use Microsoft or RedHat and follow all their licensing rules, but that hasn’t changed. Now we are adding another layer of software to the mix. Once you start using a virtualization product how easy will it be to migrate to another platform in the future? Are you now married to that platform for 20 years? All the large technology companies love the fact that you are adding another level of dependence onto your solutions. What about server hardware? Now customers are required to purchase blade servers capable of handling 100s of virtual servers. When a hard drive fails they can’t just order any drive off the net, instead they need to spend enterprise money to purchase a drive that is compatible with the blade server. Are you loosing your freedom? You just have to remember that the big players like Microsoft, IBM, Citrix, and others have large marketing divisions working for them. They made Vista seem like a great idea at one point.

Cons of a Dedicated Server:

We are going to keep the cons list short since we addressed most of these above.

  • Price – We have provided examples where this might not be true, but in most cases the primary reason to move away from a dedicated server environment to a virtual environment is cost. Most businesses will review their current situation and determine where they can save money. The savings may come in the form of hardware, energy, space, or licensing. Each company is different so there is not a “one size fits all” approach here.
  • No Green Factor – Green is big business today. Large companies receive huge tax breaks by being green. Customers seem to seek-and-destroy companies who are profitable and not “being green”. So managing thousands of dedicated servers may not be great for a company’s image when there are other choices out there.
  • Hardware Complexity – When you have more items to manage the risk of making a mistake increases. Dedicated hosting solutions can become more complex due to their hardware separation. Sometimes you have completely different hardware performing the exact same tasks. So hardware management requires more time. You might also have to learn and manage additional technologies like a hardware load balancer. With virtualization, many of these items are build into the software package. One of the main advantages to virtualization is the universal management software that allow a network admin to monitor everything more easily. With dedicated hosting you have to design and implement your own management system.
  • Servers Not Being Utilized – Many dedicated servers are only using about 20% of there computing capacity. This is waste of resources and one of the main reasons companies are looking to virtualize. Trying to get the most out of your hardware is more difficult using a dedicated server environment.
  • Growth – When you have to add a new physical server to your environment it takes some planning. You have to purchase equipment and then load the OS, security patches, and plan out physically connecting the server to your network. With virtualization you can usually bring up another server within minutes by using a copy of a virtual server. If you are a company adding 10 severs per month then this con may be larger for you than most.


This article wasn’t intended to push you in one direction or another. I think it is important to review all the facts before deciding if a virtual environment is better than dedicated hardware. Both choices share their own set of pros and cons and these should be reviewed by each individual company well in advance of implementing a change. In some cases the cost of change might be more than expected in both time and money. While other businesses might save millions and increase their service reliability through virtualization. Only you can determine what direction is best.