We are currently working on beginning to virtualize some of our servers, mostly for the added convenience of easy recovery. That being said, the methods available to backup the virtual servers are very important in my decision of what product to choose. I have already virtualized a few, and they are running on VMWare Server, with Windows Server 2003 x64 as the host OS. The server has 4 15,000 RPM SAS drives in RAID 10 for storing the VMs, 8 GB of RAM, and an LSI MegaRAID SAS 8308ELP Controller, with dual Gigabit LANs. The host OS boots off of a seperate RAID 1 array made up of 2 36GB WD Raptors. It also has dual 2.00 GHz Intel Xeon Processors. As stout as this system may seem, it seems I am having some performance degradation with just two virtual servers running, one Exchange Server with about 100 mailboxes that average around 200MB a piece, and one web server that runs a specialized non-intensive web application with DB2 and Apache. Should I be seeing this? Would my performance be significantly better with ESX Server as the host? Are there any weak spots I may have in the hardware? I know for a fact that hardware virtualization is being used on the Xeons. My big worry with going to ESX is that the VM files are not as readliy accessible via a Windows share as they are when W2K3 Server is the host, therefore making backup a more complicated process. I also then lose the abililty to easily move the files from a failed host to another operable one, and just boot it up quite as easily. Anybody have any suggestions for what route I should go? Any insight from someone who has already done some of this? Perhaps there is another virtualization product I should consider? Thanks for the info in advance, I know this is a complex question, but its also a complex problem.