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Converting SBS2011 to VM

Good Day-
I inherited a customer with SBS2011 and I need to get him onto Server 2012.  What's the possibility of virtualizing his existing machine and installing it on the same box under VMware? The intention is to better utilize his existing equipment and migrate him to separate SQL server.  Outsource his exchange server.

Your input both positive and negative are most welcome.
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totallyonto. thanks for your input.  I'm not surprised at all.

thinking an intermediate physical machine to restore to. then migrate the domain to 2012 on the good box, if thats at all possible.

hands are tied no matter what we do.
you could certainly move SBS to another machine temporarily if you plan to re-use the current hardware, but its one hell of a process to follow.
Using the P2V method is probably the least messy, as restoring SBS to new hardware directly is even harder.
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Thank you all for your input.  It's crippling to have a 10 person office using heavy SQL and Exchange on SBS 2011.  Hoping a complete domain rebuild will not be necessary.  They are trying to minimize costs.
Hi Lee,

With regard to P2Ving a DC, I have always believed you should always do P2V in DS restore mode as P2Ving any live database can cause corruption if the P2V software cannot request the application to clean the DB before it is copied. Many P2V apps are known to have this issue with AD.

DS restore mode is the only situation where a DC (in this case SBS) can be running without having the NTDS.dit files open and in use.
Otherwise an OFFLINE P2V is best ensure corruption is kept to a minimum. AD can fix itself in many cases so I acknowledge it is often fine, but its best to avoid the corruption in the first place.

While some versions of ESX & Hyper-v don't officially support SBS (and can result in a few unrecognised drivers) the primary reason for not P2Ving it would be performance in my opinion.
SBS is a very busy server, with a mix of various bits of software that shouldn't really ever run on the same box, according to many best practices (exchange shouldn't really be on a DC to start with, for example)

The primary idea of virtualising is to share resources between multiple VMs to make the best use of the resources available.
As SBS is a very busy server (SBS is well known for causing heavy disk access) the resources being shared should be carefully considered to ensure the SBS isn't going to affect any other VMs in use.
if the only intention of P2V is to free up the existing hardware to create a virtual environment then perhaps the argument regarding resources doesn't apply?
if building a dedicated DC immediately after P2V AND migrating off of sql and exchange were doable in 3 days time?
You're quite right. The advice given above is a general consideration for virtualising SBS servers, but it is only a temporary step so it's certainly possible as advised in my original post.
If you intend to run only the SBS server on a dedicated host, the resources are not going to be shared with other VMs so it's not such a big deal, assuming the additional overhead of running a VM system isn't an issue as this does need to be considered.

If you intend to run any other VMs it definitely applies though.