Consolidating servers on fewer machines using virtual server software can result in reduced costs, improved security, and easier backup and recovery, but the technology has some downsides. Among them:
Unexpected costs. With a virtual server, you have to pay a separate licensing fee for every instance of the operating system you place on the server. This isn't a problem when consolidating applications to fewer physical servers because you'll have the same number of operating system licenses on the consolidated server(s) as you previously had spread across multiple ones. But if you're using virtual servers to break up applications that had been on a single operating system to run on separate ones, say for better security, then licensing costs may rise.
Greater fallout from isolated failures. When a single hardware server runs multiple operating systems and applications, a single power-source or component failure can cause more widespread application damage.
Management complexity. Reducing the number of servers should decrease management responsibilities, but a virtual server solution does not reduce the number of operating systems. Therefore, software management work remains about the same.
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