Virtualization was invented more than thirty years ago to allow large expensive mainframes
to be easily shared among different application environments. As hardware prices
went down, the need for virtualization faded away. More recently, virtualization at all
levels (system, storage, and network) became important again as a way to improve system
security, reliability and availability, reduce costs, and provide greater flexibility. This
paper explains the basics of system virtualization and addresses performance issues related
to modeling virtualized systems using analytic performance models. A case study
on server consolidation is used to illustrate the points.