This article [vmware.com] compares performance of software and hardware virtualization techniques. What is most surprising is that the results are mixed: hardware-assisted virtualization can actually be slower than pure software virtualization under certain workloads. Wow!
The benchmark was done with VT-enabled Pentium 4. It would be interesting to see how the AMD's Pacifica hardware virtualization compares.
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Typically the argument for Hardware virtualization or Software Virtualization comes down to these factors:
1. Typically Hardware virtualization (best example is blade server) have more raw IO and processing capabilities in a smaller physical space.
The idea is meant for a data center where, for example, you need a lot of processing power say for hosting game server and you want to throw a lot of new servers online to handle the increasing volume.
Another example would be a web hosting facility or similar server host facility where rack space is a premium.
In a hosting facility you pay monthly for rack space so the initial costs of the blade server environment can make sense (although this is a delicate balance vs small 1U servers).
2. Typical Software virtualization (best examples VMWare, Hyper-V, Xen) offers better utilization of hardware resources and less power.
This idea is meant underutilized server, for example, a corporate environment where hardware is underutilized like a file server that requires a lot of disk space but not much on processor or memory and a web server that is not much on hardware, processor, or memory and maybe a login server that doesn’t do much processing. Make them all virtual machines and save yourself some hardware cost.
Most, corporate servers typically only utilize about 10 to 15% of the hardware’s capabilities. Also, and this is important, software virtualization give a ton of flexibility.
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