Virtualization allows a PC or Server to host several virtual machines which are able to share physical processors ,memory and disk storage subsystems. Virtualization allows front end web servers which are not processor and memory intensive to share physical hardware and thus reduce power,cooling and capital expenditure.
By consolidating physical legacy servers as Virtual Machines(VMs) hosted on powerful dual core or QUAD core hardware, IT departments can reduce costs and increase performance in many instances.Also the ability to migrate live VMs between physical servers without downtime also serves as a value added feature since this increases system up-time and department SLA compliance.
Legacy apps exist in many companies.These legacy applications due to the challenges associated with migration may still be hosted on old pentium 3 and 1st generation Pentium 4 hardware. The performance increases that can be gained by converting a physical server to a VM and hosting the VM on current hardware can be very great.
Exporting physical server settings and creating VMs that mirror these physical server is now possible and as such companies need not worry about migrating across hardware since no re-installation of software is required.