With the release of Microsoft Windows Server 2008 with Hyper-V, virtualisation of SQL Server is now a realistic mainstream scenario.
Hypervisor technology removes the layers of un-necessary software that normally sit between a virtual server and the hardware. The effect of this is that virtual server performance is now comparable to running directly on the hardware.
SQL Server performance is heavily dependent on storage and virtualised offerings have typically been too slow for production use. With SQL Server 2008 and Hyper-V the following scenarios can now be enabled with virtualization:
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