Virtualization can probably reduce the number of servers in a typical datacenter 30-50% and that also lead to some modest maintenance cost savings as well as electricity and air-conditioning related savings. Low end servers as extremely inefficient from the point of view of electricity consumption and add considerable to air-conditioning costs as their power supplies are very inefficient.

Virtualization also dramatically influence configuration management, capacity management, provisioning, patch management, back-ups, and software licensing. It inherently stimulates adoption of open source software, especially scripting-based solutions. It also opens a lot of new possibilities in saving time on system administration, electricity savings as well as makes possible some extremely impressive (albeit not yet fully practical) feats like a dynamic migration of a virtual instance from one (more loaded) physical server to another (less loaded).

Organizations can choose from a wide variety of virtualization solutions in order to better manage their applications. After determining whether virtualization is appropriate for a particular application and selecting the best virtualization technology, the planning process can continue.

There are several different forms of virtualization that need to be understood as a basis for making the right technology choice.

Server Hardware Virtualization:
Also known as a hypervisor, Server Hardware Virtualization runs a very lightweight core operating system. The hypervisor can host independent virtual machines (VMs). This form of virtualization requires hardware that has embedded virtualization awareness capabilities. Since the hypervisor is very lightweight, there is little overhead in the system, which allows for more scalability in the virtual machines.

Server Software Virtualization:
An operating system, such as Windows Server® 2003 or Windows Server 2008, runs an application that is able to host virtual machines. Each virtual machine runs a completely separate operating system and application set.

Presentation Virtualization:
Centralized systems host multiple user sessions, and all processing is done on those host systems. The user sessions are isolated from each other. Only the presentation information, such as keyboard and mouse inputs, and video updates are sent between the client and the host system. The client can be a full Windows-based workstation or a Windows-based terminal device.

Application Virtualization:
An application is isolated from the underlying operating system by means of wrapper software that encapsulates it. This allows multiple applications that may have conflicting dynamic link libraries (DLLs) or other incompatibilities to run on the same machine without affecting each other.

Desktop Virtualization:
This is similar to Server Software Virtualization, but it runs on client systems such as Windows Vista®. The client operating system runs a virtualization application that hosts virtual machines. This is often used when a specific person needs to run one or a limited number of legacy applications on a legacy operating system.