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Further, Hyper-V will come to market lacking advanced features, such as live VM migration, that have long been present in VMware's enterprise offering. On the other hand, Hyper-V comes "free" as part of the operating system; and Microsoft's integration of virtual machine management into its pantheon of management tools is sure to be a hit with Windows shops.

Marketing buzz aside, the truth is that server virtualization fundamentally changes the way a datacenter looks and feels -- and no major transformation comes easy.

Gotcha No. 1: You May Not Get the Hardware Savings You Expect

One of the great ironies of server virtualization is that many people expect the technology to save them boatloads of money from the outset when, in fact, it often costs them more. That's because server virtualization demands two things: shared storage and some new servers that are powerful, richly configured, and equipped with hardware memory chips from the likes of AMD and Intel.

Even if you already have these souped-up servers, you're still not out of the woods. Server interoperability issues stymie many virtualization journeys. "You can't mix AMD and Intel platforms together in the same [VMware] ESX cluster," says Chris Wolf, an analyst at the Burton Group. "You cannot move a virtual machine between them without restarting."

The same goes for a storage area network, or SAN. Not every SAN supports a virtualized environment. Also, existing network bandwidth may not be sufficient to handle the needs of a growing number of virtual servers. This means you'll likely end up spending money on new servers, switches, and other tech gear. Even worse, upgrade costs can offset nearly all the initial savings from decommissioned servers, says Matt Prigge, a consultant and Test Center contributor.

When the server virtualization wave began to crest, industry watchers thought that the server market would be in a lot of trouble. After all, virtualization allows people to consolidate many applications onto fewer servers—preferably existing ones. And they were partly right: Gartner believes that virtualization reduced the x86 server market by 4 percent in 2006.

But it soon became apparent, the Test Center's Dineley says, "that you needed to strictly standardize on hardware for your virtual farm." Thus the server market remains strong: Some 8 million servers were shipped worldwide last year, a 6.7 percent increase from the year prior, according to IDC.

Most people tackle hardware standardization and server virtualization slowly, usually when servers are due for retirement. They dabble in noncritical areas such as print servers before moving on to e-mail applications and enterprise databases. "It's a rolling-thunder approach," says John Humphreys, an IDC analyst. "We'll start to see the impact on [server] unit growth two, three, or four years down the road, as more people virtualize."