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Scenarios driving virtualization:

• Server consolidation – lower data center costs
• Application migration
• Increased IT agility – reduced deployment and provisioning time
• Software development and training

Steps to get you ready for virtualization:

Step 1. Determine Whether Virtualization Is Appropriate:

Compatibility :  Determine whether the workload can run in a virtualized environment.

Supportability :  Determine whether the workload is supported in a virtualized environment. It might be necessary to verify third-party vendors’ policies for deployment of the workload on all the virtualization technologies that will be used.

Licensing : Determine whether the workload can be licensed for use in a virtualized environment.

Business benefits :  Determine the business reasons for virtualizing the workload and the related benefits.  Potential benefits include cost savings, reduced deployment time, and reduced administration costs.

Step 2. Categorize the Workload

Workloads designed for server operating systems typically have different resource requirements and different levels of interactivity than those designed for client workloads.

Step 3. Select Server Hardware or Server Software Virtualization

Microsoft offers two server virtualization products:
Windows Server 2008 R2 Hyper-V, which provides server hardware virtualization.
Virtual Server 2005 R2 SP1, which provides server software virtualization.

Step 4. Determine Client Connectivity

Option 1: Connected Client
Client computers that will always be connected to the network when running a particular workload can rely upon the network in order to access their applications and data. Typical scenarios include corporate desktop computers and kiosks as well as some computers used in remote offices and home offices. This option should be selected when client computers will have reliable network connections and do not need to run applications when not connected to the network. If the client will always be connected, proceed to Step 5: “Determine Workload Location.”

Option 2: Disconnected Client
Client computers that must have the ability to run virtualized applications while disconnected from the network will require versions of the applications that are resident on the disconnected computer. These options are most useful for situations in which users need only occasional access to applications while traveling or when network connections are unreliable. If the client may run disconnected, proceed to Step 7: “Choose Application Virtualization or Virtualization on the Desktop.”

Step 5. Determine Workload Location

Option 1: Centralized Workload
If the workload can be centrally managed and efficiently run from a server, consider a centralized approach to application virtualization. This is beneficial when the workload configuration needs to be tightly controlled or when resources must be centrally managed. It allows for easier deployment and management of workloads.
Proceed to Step 6: “Select Desktop or Session Virtualization.”

Option 2: Decentralized Workload
Some workloads cannot be run from a central server or they require individualized configuration or access to local system resources to run efficiently. These workloads should be deployed using a virtualization method that can be distributed to desktop systems.
Proceed to Step 7: “Choose Application Virtualization or Virtualization on the Desktop.”

Step 6. Select Desktop or Session Virtualization

Option 1: Desktop Virtualization 
VDI provides virtualized desktops that can run a wide variety of client or server operating systems since they are hosted in VMs on the Windows Server 2008 operating system. Since there will normally be only one user on the client’s operating system, he or she may be granted administrative rights.

Option 2: Session Virtualization
The client’s applications are run directly on the Windows Server 2008 operating system. There will normally be many connected clients that share the operating system and the applications, so clients cannot be granted administrative rights.
All applications that are installed on the server must be able to run on the same Windows Server 2008 operating system. Any incompatibilities should be managed by using another application virtualization technology, such as Microsoft Application Virtualization.

Step 7. Choose Application Virtualization or Virtualization on the Desktop

Option 1: Application Virtualization
Microsoft Application Virtualization (App-V) provides a method for installing applications into a virtualized environment  via MSI or streaming them on-demand. Application processing will occur on client computers. App-V requires that client computers have a complete client operating system that supports the virtualized applications, as well as meeting the hardware requirements for applications that will be deployed and executed on that computer. Sufficient network bandwidth for deploying applications must also be available. 
See the Infrastructure Planning and Design Guide for Microsoft Application Virtualization at http://go.microsoft.com/fwlink/?LinkId=160978.

Option 2: Virtualization on the Desktop  
Virtual PC allows users to run entire client operating systems on their local computers. In order to support this configuration, the client computer must have sufficient CPU, memory, disk, and network resources to support the base Windows operating system, as well as resources for each of the VMs that will be supported.
Virtual PC provides support for running legacy applications and operating systems. Windows XP Mode provides a tailored Windows XP VM that runs on Virtual PC in Windows 7.
Users can create a wide variety of different VMs and can start and stop them as needed. This solution is particularly helpful for software developers and testers who often require access to multiple different platforms.

Additional Considerations
After selecting the most appropriate virtualization technology for each requirement, decide how the virtualized environment will be managed, and determine whether virtualization technologies should be used separately or together in combination.

Managing the Virtualization Environment

To help you with the challenges of managing a virtualized environment you will need the System Center Virtual Machine Manager and MED-V. Some of the key benefits of them, include:

• Optimal consolidation of under-utilized physical servers.
• Rapid provisioning of new VMs.
• Maximization of data center resources.
• Integration with System Center Operations Manager 2007.

More info :  Microsoft Infrastructure Planning and Design (IPD) Guide for Selecting the Right Virtualization Technology