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Virtual machine (VM) density refers to the number of virtual machines present in a single physical host which can be run normally without any of them being starved from any one resource. It is a relatively new metric which is now used to measure efficiency and directly affects the total cost of ownership (TCO) of a cloud computing system or service.
VM density is the ratio of virtual machines per physical server or host. Generally, the higher the VM density, the more efficient and cost-effective the system is. But that is just a rough and face-value estimate, as many factors must be considered before declaring the actual density. For example, one could theoretically achieve a density 50 virtual machines in a single host, or as much as is allowable by the storage capacity, but only a few of them could be active at once since resources such as compute and memory may not be enough. So a more realistic VM density would be about 15 to 20 for a high-capacity physical host.
VM density is closely related to efficiency in many ways, whether it is cost per user or cost per application. It is logical that the more virtual machines you can place in a single machine decreases capital and operational expenditure, resulting in lesser total cost of ownership. But the costs come in another form, which is the increasing management cost brought about by complexity. As the VM density becomes higher, so does the complexity of the system, which results in more tedious management tasks which also results in more failures. Thankfully, the development of more advanced automation and management systems and tools are expected to offset this complexity.