Last week Microsoft announced new licensing arrangement for its products, including SharePoint Server 2007. In particular the new licensing scheme will support those who want to virtualize their server environment, since in the past enterprises taking this route were somewhat punished financially. All in all the new approach is a good one and buyers should be happy. At the same time this raises questions about how many people actually want to virtualize their server environment, and what if any the drawbacks such an approach might present.

We have written often about the frequently viral spread of SharePoint, in whose wake there usually comes a big expansion in server farms. Hence it may make sense to consider virtualization for large distributed SharePoint environments. You can theoretically run the same processes at the same speed, with far less hardware, power usage, and costs. However you also need to consider that not all security systems support virtualized environments, and that some virtualization systems suffer from performance and CPU usage problems, issues that can be very hard to track back to their roots in a virtualized environment. You should also consider that virtualization software cannot bend the law of physics; you need to realize that popping everything on one machine dramatically reduces the number of I/O's for network resources, memory and CPU ( they now all share the same I/O), and in some cases you will see performance drop.

At a pragmatic level you should not see virtualization as a cure to SharePoint viral growth. SharePoint proliferation issues stretch way beyond hardware issues, and into compliance, governance, and productivity. Nonetheless, running SharePoint servers farms on virtualized hardware is a sound thing to look into, and the improved licensing makes it even sweeter to consider.

So don't count me among virtualization nay-sayers. However, good IT management and good SharePoint practice and governance I like even more.