You can approach server consolidation in several ways. Allan Hirt’s “SQL Server Consolidation” recommends using workload consolidation to tackle SQL Server consolidation. In this scenario, you combine the workloads from multiple servers. The article explains that in SQL Server workload consolidation, you can combine databases under a common instance, or you can add a separate named instance for each database to be consolidated. SQL Server instance support is designed to allow this type of consolidation, and SQL Server itself can effectively service the requirements of multiple databases. Another option for achieving your server consolidation goals is to use virtualization. You can use a product such as Microsoft Virtual Server 2005 Release 2 (R2), VMware Server, or ESX Server to provide the virtualization support. Virtualization lets you essentially mirror your physical server environment by creating virtual machines for the servers that you want to consolidate, then running SQL Server on those virtual machines. This solution has the advantage of keeping security issues completely separate. In addition, virtualization lets you maintain current server ownership and administration duties. However, because of the additional overhead, virtualization is best suited to consolidating servers that don’t have I/O intensive workloads. To learn more about SQL Server, virtualization, and multi-instances, see the Microsoft article “Virtualization and Multi-Instancing” (http://www.microsoft.com/sql/howtobuy/virtualization.mspx).