I recently spoke to TechTarget's Joan Goodchild, here is part of the article.

Quoting from TechTarget

As needs for data centers grow, available space for servers has decreased. To address these urgent space constraints, many IT managers are looking at virtualization and blade servers as ways to consolidate.

Virtualization means creating a virtual, rather than actual, version of a computing environment. Virtualization is useful for consolidation because one physical server can host several virtual versions of an operating system or application.

Virtualization is a good option for IT shops with several servers that are running applications that do not use up much of the capacity in the box, according to virtualization expert and author David Marshall, co-author of Advanced Server Virtualization: VMware and Microsoft platforms in the virtual data center.

"You may have a group of servers way underutilized. Those are good candidates to be consolidated through virtualization," said Marshall.

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Blades as an alternative

Blade servers are another popular choice for consolidation, but they work more appropriately in data centers with several servers that are operating at or near capacity. A blade server is a chassis housing multiple slim boxes, known as server blades. Each blade is also a server itself, hosting an application or operating system. The slimness of the blade servers cuts down significantly on space because they are much smaller than the traditional rack servers currently used in most server rooms.

Consolidating with blades is simply a physical consolidation and a reduction of server size. Blades are good for shops that are ready to spend the money to update their hardware, Marshall said. Blades in the data center are also an attractive option for IT managers who are more comfortable with something they can touch, he added.

"While upgrading to blade servers is different than migrating from one rack server to another, migrating to new hardware is typically an easier pill to swallow than moving to whole new methodology like virtualization," said Marshall.

Blades are still far off from replacing traditional rack servers completely, but they are gaining market share quickly. Research from IDC in Framingham, Mass., predicts that 25% of servers on the market will be blades by 2009. However, blades are not without their drawbacks. Most blades on the market now generate a lot of heat and create power challenges for IT managers.

A recent survey by TheInfoPro (TIP) Inc., a New York research firm, asked 133 server professionals about their experience with blades and found that most thought they did not provide heating and cooling advantages.

However, TIP Chief Research Officer Bob Gill said blade vendors are realizing that excess power is a problem in terms of energy efficiency, and there is an initiative among them to create blades that are more energy-efficient.

Although blades and virtualization serve different needs, each technology is starting to compete with each other in the server-consolidation market, Marshall said.

"There is an intersection where these two meet and can be combined to solve other unique problems," he said. "But, with regard to consolidation, they certainly step on each other's toes."

There is room for a peaceful co-existence, however. TIP's Gill added that virtualized blades could alleviate some problems with power efficiency and consolidation.

Ultimately, blades and virtualization are technologies that will be used together in the data center of future as more administrators tighten up their space by virtualizing several systems on slim blade servers, said Marshall.

Read the entire article, here.