First question is: to virtualize or not virtualize? This can be easily determined by monitoring CPU and memory usage of the host. If a host has high CPU or memory usage, then it is not very good candidate for virtualization and the reason is that (depending on the configuration of the virtual environment) this host will either take most of the CPU or memory resources in virtualized environment or it will perform poorly because it will not have adequate CPU or memory usage. If a host has moderate CPU and memory requirements, then it is good candidate for virtualization. In that case several hosts can be consolidated in on one virtualized environment. Expected benefits of virtualization are reduced power and space requirements, reduced hardware cost and the ability to provision virtual hosts instances very quickly. If most of these or all of these benefits are not available in the virtualized solution, then really there is no need to virtualize hosts. Again, this should be considered during planning and requirements gathering phase and an organization should not jump to virtualization just for the sake of using the latest and the greatest technology.
One of the best use cases for virtualization is in QA (quality assurance) environment, where QA team needs to perform functional testing of an application(s). Often work load for the QA team is very high and time can be saved if new host instances can be provisioned quickly and then archived or even deleted after the QA testing is completed. In this case savings in almost all areas of the expected benefits of virtualization listed above are achieved, but for this use case, even if only time that it takes to provision new hosts, in the form of virtual hosts, is saved, then is well worth is, because QA team will be more efficient in what they do and it will reduce the time it takes to bring new products to market, thus reducing expenses in man hours for QA testing and revenue will be increased since new products can reach the market earlier. Bringing new products on the market, on time, often is more important for an organization than associated costs involved in creating the product, because if a company gets first-mover advantage in the new market, then initial costs will be offset by high market share and profits made on that market.

I agree that virtualization has significant potential for QA testing but it is also applicable for Green IT (reducing energy requirements by optimizing server utilization rates) and Cloud Computing (applying virtualization to data center in order to create secure private clouds).
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