Back in the early days of virtualization (and probably still today) consultancies everywhere would sell you a package whereby they'd tell you which of your servers would make good virtualization candidates and which would not.

What they didn't tell you was that those services mainly used free tools -- like PerfMon -- that you already had at your disposal. Nowadays, we know more about virtualization and what types of performance characteristics make good candidates (rather than just saying "Terminal Servers won't work"). You just need to know what those PerfMon characteristics are.

Microsoft helps the process by providing a three-step process to assist you with understandinging and determining virtualization candidates. The process is pretty easy:

1. Server Inventory - collect information regarding all existing servers across your network
2. PerfMon Capture - capture performance counters including CPU, Disk and Network Utilization of each server that you want to consider virtualizing (note: we recommend you run this for at least a few days if not a few weeks so you can capture all the "peaks and valleys" of utilization)
3. Virtualization Candidates Reporting - generate a report with virtualization candidacy recommendations

Even better, they provide the tools to make all of this extremely easy. Just install, run, and go. Learn more about the MAP (Microsoft Assessment and Planning) tool at this web site: http://blogs.technet.com/mapblog/archive/2008/04/23/how-to-series-for-microsoft-assessment-and-planning-part-1-server-virtualization.aspx