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Server consolidation refers to the use of a physical server to accommodate one or more server applications or user instances. Server consolidation makes it possible to share a server’s compute resources among multiple applications and services simultaneously. It is mainly used to reduce the number of servers required in an organization.
The primary objective behind server consolidation is to consume all of a server's available resources and reduce the capital and operational expenses associated with multiple servers. Traditionally, only 15-30 percent of a physical server's overall capacity is used. With server consolidation, the utilization rate can be increased to well over 80 percent. Server consolidation works on the principles of server virtualization, where one or more virtual servers resides on a physical server.
Server consolidation uses a multi-tenant architecture where all the installed and hosted virtual servers share a processor, storage, memory and other I/O and network processes. However, each virtual server has a separate operating system, applications and internal services.