VMs vs. Multiple SQL Server Instances

1. Performance
VM can not provide the same level of performance as the physical machine, most estimated VM overhead is at 10% - 15%.

2. Software Patching
VM will add more OS & software patching and administrative effort.

3. Backup/Recovery & Replication
VM has the advantage on backup/recovery and replication to another machine.

4. Licensing
Multiple SQL server instances don’t require any additional SQL Server licenses. For virtualization, each SQL Server system that’s running in a guest VM must be licensed—unless you’re running SQL Server 2005 Enterprise Edition, which provides unlimited VM usage.