Are you familiar with Virtuozzo, and how do you suppose that it should be compared to offerings from VMware, Microsoft, and XenSource?
You make a really good point regarding the fact that there are multiple approaches to solving the virtualization problem. In fact, I have just completed writing an article that evaluates the various layers at which virtualization can take place (it should be available soon). I usually refer to products such as SWSoft's Virtuozzo or solutions from Softricity as "application-level virtualization" (as opposed to "server-level virtualization" which is the approach taken by Microsoft Virtual Server, Xen, and VMware).
The major advantage of this approach is that it can be extremely scalable - hundreds of instances of a particular application can run on a single physical machine. In many cases, it can be quick and easy to setup virtualization at the application-level and to provide access to end-users. There are, however, drawbacks -- mainly, aspects such as operating system settings, patch levels, security configuration, and device drivers are all defined at the system level. If your application requires these types of changes, application-level virtualization may not be the best fit. Also, complex network and configuration requirements for multi-tier Enterprise applications may not be easy to configure. Overall, however, this approach can be economical and can be a great way to run multiple instances of a relatively simple application. Keep an eye out for my upcoming article!
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