Seriously? A dark side to virtualization? If virtualization technology is phased in by someone that has a clue this cannot be an issue. Take something like Exchange 2007 – will the performance be worse virtualized? Yep. But what kind of horsepower do you really need for 100? Or 1,000? A modern server on the VMware HCL that is configured reasonably should be able to take 30 to 40 servers, which means that many SMB’s could get away with a two node cluster.
Virutalization allows for enormous flexibility. Even if you run the most basic version of VMware ESX, you’ll get fully encapsulated virtual servers that you can back up cheaply with a product like vRanger from Vizioncore for complete, bare metal backups. You could run two or three servers per host and see incredible DR and utilization benefits very cheaply.
If the issue for SMB’s is that they are going to be dumb and deploy a technology in a way that dreadfully increases risk that’s a not a technology problem. That’s a stupid person problem.
It really sounds like the analyst wanted to say something to stir it up. Congrats, man, but you just sound ignorant.