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As more and more IT regulatory mandates are enforced by your organization, managing what's virtual is compounded astronomically. Your VMs will eventually move into production (if they aren't already). Long gone are the days where VMs are only seen in test and dev. Try unplugging a VM from your network if there is a security breach. Try making sure it's backed-up. Try checking to see if it's been patched. Where is the machine anyway? What else will go down? Who else is on that machine? You get the idea. Not to mention that you're definitely not going to run all your apps on VMs. Most of your mission critical, heavy transaction applications and databases will stay on bare metal.  So what to do? Here are some simple recommendations to consider when embarking on your virtualization hunt in 2007:

1. Virtualize from the OS up. When people think virtualization, they think VMware. But VMware is only one option in hypervisors. There are others...Virtuozzo, Xen. My clients absolutely love SWsoft's Virtuozzo for example. They run it on our Egenera systems for Windows VMs and have been very happy. Keep an eye out for this hypervisor in 2007.
2. Virtualize from the OS down. Why just reduce the number of servers you have? True virtualization includes replacing physical components with software. Reduce the number of NICs, HBAs, local disks, cables, routers, switches, etc. Less I/O, not just fewer servers. One word of caution here: purchasing separate platforms for VM environments and mission-critical non-VM environments just adds to the complexity. Try to invest in a platform that is flexible and scalable enough to do them both at the same time.
3. Manage your hypervisors more effectively. Just because you bought ESX and Dell doesn't mean you have solved your complexity problem. Many find it's just the opposite - particularly on the management side. There are solid solutions on the management side - of course, Egenera PAN Manager, also Opsware and BladeLogic. All of these work well with hypervisors. I should mention that Egenera PAN Manager comes with an out-of-the-box hardware platform layer that also solves #2.
4. Utilize tools to migrate and right-size. Consider physical-to-virtual (P2V) tools like Platespin that can help migrate your physical servers to virtual servers...make these moves repeatable and scalable. Being able to right-size your VMs is critical.
5. Disaster recovery shouldn't be an afterthought. Make sure your solution includes a site-to-site replication strategy. VMs will be used for production applications in 2007. Tie your VM architecture to your SAN architecture. More about my thoughts on the right DR approach can be found in a previous entry.

Happy Hunting!