Virtual or Physical Machine

We are running Oracle 11g database on linux and want a high performance machine therefore we bought 128G 2xE5-2650v2 Server.
I have two options, one is to install everything like Oracle etc on the physical machine. Whereas the other option is to install Xen and create only one VM on this physical machine and allocate almost all resources to that single VM.
My question is if the performance in both the cases will be same?
I prefer Virtual machine due to its ease of maintenance/backups etc.
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Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
If this is Performance Critical, I would advise against the virtual approach, as the Hypervisor will reduce the performance of a single VM, as all the I/O will be virtualised.

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Tomas Helgi JohannssonCommented:

If you want High Performance Database then I to advice against virtual approach
especially when you say "allocate almost all resources to that single VM".
How much resources will you allocate to that VM ?
Virtualization is used if you want to have 2 or more VM's run in parallel on a physical host which has many advantages.
Software license cost also plays a role in such a decision.

     Tomas Helgi
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