When hypervisor-based computing was pressed forward as application hosting option in the early 2000s, a large part of the value proposition had to do with the benefits of server consolidation that would be realized from server virtualization. Leading analysts claimed that the consolidation value would be so significant that consumers would see a sharp decline in CAPEX spending that would more than compensate for the cost of hypervisor software and services. Plus, with the reduction in physical hardware kit and the resulting reduction in floor space and environmental costs, IT shops would also realize OPEX advantages: fewer servers translating to fewer server administrators, smaller IT staff and reduced labor costs.

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