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Virtual Servers

Are you using technology like VMware for production systems or maybe to create yourself a great development environment? The promise of better server utilization is there. We all realize how low processor power is really used by many of our enterprise apps. So why not take advantage of this situation?
The current RealityIT article deals with this. Would be good to hear what you all in the world are doing in terms of server consolidation, virtual servers, and related technology.