new server setup suggestions

I am setting up a new server and wanted to get some feedback on the best way to set it up.  The server will host 2 smaller private websites with less then 100 people at one time in both sites combines.  The sites are in .net 2.0 and use a sql 2008 database,.  The goal is to make the 2 sites are fast as possible.

here is what I have
HP DL380 G7 (2x) quad core, 32 gigs memory
I do have 7 drives in the system

4 x 146 15k drives
3 x 300 10k drives

originally I was going to just install server 2008, sql 2008 with 3 raid drives
and run it that way

also, we have a Cisco 3550 gig switch that the server/SAN will be plugged into and we will be running IIS as our webserver

couple of thoughts that I wanted some feedback on

#1 SAN
we have an HP X1400 8TB SAN that I could use and put the database on there so I could use the snapshots features so that should my server die, I can bring up a backup pretty quick.

Question with SAN:  
will this config cost me in terms of speed?  would hosting the database on the local server be faster or would it be pretty close in terms of speed to put the database on the SAN.

#2 VMWare
should I install VMServer on the box, then install server 2008 on that?  this way I could have a spare image should anything happen with that image.  I also have a second server that I could use a copy of the image as well, in the event of hardware failure.  

Question with VMWare:
will the overhead of the VMWare cost me greatly in terms of performance?  
Will the way in which VMWare usings the drives (i.e. I'd use one of those raids for the VMWare and the other 2 for the windows/sql server image) cost me a ton in terms of performance?

I realize this is a broad question so I was just looking for some broad, directional feedback

thanks in advance
Who is Participating?
Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
The HP DL380 G7 is supported by VMware's Type 1 Hypervisor called VMware vSphere HypervisorTM (ESXi). New name for ESXi.

Free download from here, (just need to register for license key, and apply). This is the same hypervisor used in the licensed systems of ESXi

I would install ESXi Installable on good quality USB/SD cards for this server.

Using a Type 1 Hypervisor and VMFS datastores for you Virtual Machines, I don't think you would notice the performance.

As you for your SAN, you would need to check performance on local disk versus SAN. Local disk is often faster, but you may not notice for your application.

For performance RAID 10 is often preferred to RAID 5, but the compromise is reduce storage space. It depends on how busy I/O your SQL server and IIs servers require.
Ok...first of all, your host is robust enough to do what you need/want. So, you're good to go there. I run DL380 G5's in my vSphere environment, so I'm pretty confident yours is on the HCL (you can verify here just to be safe:

Should you install VMware Server?, but you could install ESXi on top of your hardware, then install your 2K8 box (VM) in ESXi. I recommend spending an extra $500US to pay for vSphere Essentials, which gives you the capability of having 3 hosts in your environment (if you don't have a 3rd right now, this just gives you the option of adding 1 later down the road), vCenter Server, and along with vCenter, centralized mgmt capabilities like cloning, migration, HA, backup API (need 3rd party VM backup solution..usually $500US per host CPU socket), etc. (see this matrix for exactly what you get with Essentials:
). OK, they actually changed the 'kits' somewhat recently. You'll actually need to get Ess Plus for HA, etc.

As far as overheard, using vSphere ESXi will not hurt you as far as overhead goes. vSphere does a pretty good job of dispersing/allocating hardware & resources as you would see in a physically hosted environment.

To answer your disk storage performance question vs., there isn't any gain in using local vs SAN storage. Disks are disks, whether they're local or SAN-based.

My recommendation? vSphere Essentials (for starters), along with Veeam Backup/Replication for VM backup/recovery.

Hope that helps.

Ha...don't know where the "The" came from above. :) (typo)

Anyway, to add - If this is going to be a critical production host (assuming it is), I normally would suggest like "hanccocka" install ESXi on USB; but if this is critical, I don't recommend doing so. Reason is if the USB stick crashes (have yet to see that tho), you physically have to take out the crashed USB and replace it with a working one (you should create a USB copy if using USB to install ESXi). If this is after hours, your downtime could be for an unwanted extended period of time. If you have 2 more bays in your host to have a RAID1 (small disks of 30GB is more than enough) to use for your ESXi install, that would be my recommendation. That way if a drive crashes, you're still up and going with the 2nd disk in the RAID1. Regardless, I recommend something to install ESXi on (if that's the route you go with) *other* than your datastore storage disks (beit local arrays or SAN). I've seen several posts here on EE where folks have problems removing or expanding datastore storage, etc. because their ESX/i install is on the same array. Keep everything separate when/if possible.

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