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Performance issue found on disk containing transaction log files Exchange 2007

I installed exchange 2007 in a HP DL380 G6 running win 2008 std 64bit. This exchange server coexist with my exisitng exchange 2003. I moved about 200 users already but lately, I noticed we are having some performance issues. The operating system is installed on the the C:\ drive. Exchange and databases are installed in the D:\ drive. Both partitions are running in the same RAID5. The total free space is about 50% for my D:\ drive. I am wonderign if I shrink my d:\ drive and create a new partition would help. Everythign would still reamin on the same RAID 5 with SAS hard drives anyway.
Thanks for any help!
Moises Perez

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Thank you Matt and dlethe. I just ordered more hardrives and an extra controller for the server.
Thanks again!
Moises Perez
No prob, you might want to run a benchmark before & after and post as a follow-up.  That type of positive feedback can really put things in perspective.  

Here is followup on aligning into 64KB (Full link is at: http://technet.microsoft.com/en-us/library/bb738145%28EXCHG.80%29.aspx )

Most partitions are misaligned when they are using the Disk Management tool. Therefore, we recommend that you create partitions by using the Diskpart.exe tool instead. Aligning sectors to track boundaries can have performance benefits, depending on the storage. Always use the storage vendor's recommended setting, but if your storage vendor does not have a recommended setting, use 64 kilobytes (KB). When running Exchange 2007 on Windows Server 2003, we recommend that you use Diskpart to align the storage track boundaries on all Mailbox servers (including clustered mailbox servers), Edge Transport servers, and Hub Transport servers, regardless of the partition type you are using. For detailed steps about how to use Diskpart to align input/output (I/O) with storage track boundaries, see How to Align Exchange I/O with Storage Track Boundaries. You do not need to use Diskpart when running Exchange 2007 Service Pack 1 (SP1) on Windows Server 2008.

Partition Allocation Unit Size

In Exchange 2007, we recommend that you configure the NTFS file system volumes hosting databases with an NTFS allocation unit size of 64 KB. This recommendation is based on performance improvements seen with large sequential read operations. This type of profile is typically seen with streaming backup and Exchange Server Database Utilities (Eseutil) tasks.

In some scenarios, there is a benefit with sequential I/O, particularly when performing a streaming backup, or when running Eseutil for a Volume Shadow Copy Service (VSS) checksum integrity or database repair. Always use your storage vendor's recommended setting, but if your storage vendor does not have a recommended setting, use 64 KB.

Testing has shown that changing the NTFS allocation size from 4 KB to 64 KB does not result in any increase in transaction log sequential throughput. Therefore, you can utilize the default NTFS allocation size (4 KB) for NTFS volumes hosting transaction log files.
ok. thank you!
Moises