Normally, a physical server will run one operating system, and that OS will have multiple server applications installed on it--a Web server, email server, database server, and so forth. However, running multiple server applications on a single OS increases the possibility that one application may interfere with another, causing bottlenecks or even crashes. By partitioning applications in different virtual machines, each application has its own OS and resources, and is less likely to interfere with other applications.
5. Provisioning new servers for prototyping, testing and migration is simplified.
With virtualization, creating an additional server for testing takes a few minutes, and doesn't require any additional hardware. In contrast, buying a new physical server (or keeping extras on hand for testing) is expensive, and installing the operating system and applications can be quite time-consuming. Since existing VMs can be cloned with all operating system configurations and applications, it's a very simple process duplicate a production system to test new patches or a new version of an application.
6. You can save energy.
While strides have been made in energy efficiency for servers, it's still cheaper to run one or two big servers than a dozen or more separate ones. With the latest servers, core parking and other features allow resources to be shut down when not in use, further reducing energy usage. A large server hosting dozens of VMs may not use any more energy than one small server at low levels of utilization, and it can replace dozens of small servers.
7. Virtual Desktop Infrastructure can save you a fortune on PCs.
In addition to virtualizing server OSs and applications, you may want to consider virtualizing desktops. VDI allows you to run a thin client on existing desktop hardware or new thin client hardware, and access a virtual Windows 7 or other desktop operating system. This means that you can provide Windows 7 desktops to users whose existing systems will not support Windows 7 running locally. Management can also be simplified, since patches to Windows and applications can be applied once and take effect for every system on the VDI server.
There's a reason virtualization is being used so extensively through most corporate data centers. It offers compelling savings in hardware, energy usage, management costs, and it supports great fault tolerance.