The future in practical application - one business case
Consulting as I am for a relatively small business consultancy firm which has embraced virtualization as a means to offer everybody an identical computing experience no matter which room they are in, here's where we stand now.
Having tried several hypervisors and several guest OSs, the firm is currently running a bunch of XP VMs under XenServer. Vista as a guest has been tried, including several service requests to the manufacturer (none of which were answered to more effect than to claim that this company were the only one to experience the problems encountered, despite the fact that their own self-help discussion forums are full of said problems....). Windows as a guest OS is a customer requirement; I would much prefer to move to something a little more responsive and less complicated (less complicated for me, that is) like e.g. Linux.
Web applications? What the $/%& could they offer for this company? We do OpenOffice, and some specialized script-gloms specific to this company. They work (except under Vista. They do work under Linux and Solaris using WINE. I've tested.).
The major point in this particular business case is, those VMs have to run, and if they fail, the user needs to have access to another one on the fly. That is not a future scenario, it is already being offered by XenServer (one of the main points in our choosing it -- and no, I am in no way affiliated with Citrix). VM fails, user gets replacement VM basically on the fly, with the possibility of some data loss if a file in use was not recently saved. There's some room for improvement there; I am not a software developer, but seeing what IBM did with the OS/2 back in 1996 (after a crash and reboot, all previously loaded apps restored their files to the state about 2 seconds before the crash), it should be a definite possibility to offer no-data-loss live switching between VMs these days. Come on, guys, it has only been 13 years !
As to server consolidation, that is not (in this business case) a valid concern. The servers running there have to have the maximum in computing power they can get; they are mission critical. The latter speaks for virtualization, the former strongly against at this point in time. We need direct access to the hardware here to get maximum performance. If there were the money for high-end servers, things might look rather different: the company could probably VM most of its infrastructure then. But that would require the power of a fully stacked blade center, at least. Financially out of the question.
In larger companies that canafford to throw away a few kilobucks, things are probably different. From experience, I suggest at least a month of practical tests before going virtual with the productive workload.
All that said, I do believe that virtualization is where we will end up. The management of virtual machines can be much easier co-ordinated and executed than that of physical machines, meaning a reduction in adminstration costs. If you're an admin and are not yet acquainted with the handling of a hypervisor, ye better learn or you'll be in trouble soon. Virtualization is coming, and it will take over quickly. Even in relatively small companies, just because a single server (hardware) is cheaper than ten clients, and for most purposes offers the same reaction time and better uptime.
Me, I'm off for a beer.