Three years ago, Sesame Workshop, the non-profit organisation behind the "Sesame Street" television show, was looking at a $3 million data centre expansion to keep up with its web, multimedia and data storage needs.

Instead of expanding, however, the organisation shrank its data centre by consolidating 100 physical servers to 45 Novell SUSE Linux Enterprise Servers, then virtualising 25 data centre servers into five physical machines.

"That data centre has extra space now. And we're paying less for heating and cooling," says Noah Broadwater, vice president of IS at Sesame Workshop, in New York.

Like other forward-thinking IT managers, Broadwater espouses virtualisation's obvious blessings: A company can spin up and move around virtual-machine images to meet load and use requirements at the speed of business while drastically reducing hardware, storage and cooling costs.

Unfortunately, this very convenience is a curse in terms of manageability, something Broadwater and others say can spiral out of control quickly if the rollout isn't planned properly and the virtual-machine life cycle taken into account. "I can't see consolidating 25 physical servers down to five and then needing three management servers to run it all. We've stayed away from all that," he says.

Most IT organisations have a hard time nailing down their physical inventory. They lose track of things over the years and through mergers, agrees Jim Houghton, who led Wachovia's Corporate & Investment Bank IT Utility group until a year ago and now is CTO of Adaptivity, an infrastructure consulting firm. For example, when Wachovia's IT department initially deployed Tideway Systems' Foundation application and discovery tool, "we found over 50 servers that should have been retired," he says.

Managing dynamic application-instances from birth to grave takes more than those procedures required to manage physical servers and desktops, Houghton says. For example, what of the virtual applications (or the composite of multiple applications) running on those servers?

IT executives who have virtualised their infrastructures say they've been compelled to dedicate one or more staffers for management tasks and to cross-train their staff at the systems and network operations levels. Plus, they say, they've felt pressured to choose between best-of-breed point solutions or large, enterprise management frameworks.