SQL Server 2008R2 Memory & Performance Issues

I am running SQL Server 2008R2 on a virtual Windows Server 2008R2, hosted on a VMware host running ESX 4.0.  The problem I am having is one of slow responsiveness on the server.  The server was originally configured with 8GB of memory and the SQL server was set at a maximum memory of 3GB.  

When checking the memory usage on the Performance tab in Task Manager, I found that 98% of available physical memory was being used. On the Resource Monitor I found that sqlservr.exe was utilizing the most with Working memory of 1.2GB.  This has resulted in slow response time to the users connecting to the SQL database, ase well as slow response when logged onto the server itself.

I decided to bump the physical memory on the VM to 16GB and reset the SQL memory to 4GB.
vm configuration
SQL max memory
Our current situation is that even with these changes, memory is now maxed out again around 98-99% utilized.
Performance
The SQL server appears to be using the bulk of the memory, but adding up all the running processes only nets me about 6GB in use. I’ve no idea what is using the remaining 10GB
resource monitor

Any thoughts on how I can improve performance or decrease the amount of memory that is being used?
Pancomp60Information Systems ManagerAsked:
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Pancomp60Connect With a Mentor Information Systems ManagerAuthor Commented:
Thanks David, I suspected as much too but when I adjusted it, the whole system bogged down.  But...that turned out not to be the issue.

Apparently whoever originally setup this particular VM configured the reserved memory limit to 4GB!  Have no idea why, but once I set it unlimited, my memory issues went away.  I will leave the SQL memory setting at 12GB per David's suggestion as it makes sense to me.  So far the system is running better than it ever has and since the VM was ported over from a bare-metal server 3 years ago, I kick myself for not discovering the memory configuration error earlier.
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Pancomp60Information Systems ManagerAuthor Commented:
Update:

I ran a Sysinterals App named RamMap and found that "Driver Locked" has 10,906.096K allocated to it.  From what I can find online, Driver Locked corresponds to locked pages in memory.  Since the SQL service is not configured to utilize locked pages, why would I have 10GB in locked pages?
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David ToddConnect With a Mentor Senior DBACommented:
HI,

I suggest that if your VM has 16GB of memory, then 4GB for SQL is too low. Suggest that a better figure would be in the 10-14GB range.

HTH
  David
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Pancomp60Information Systems ManagerAuthor Commented:
Lesson learned: Thoroughly check over your memory configuration and settings on the VM before addressing them in SQL or Windows.
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