iSCSI only applies if you are using a SAN. Local storage will be SAS or SATA. With iSCSI you can use multipathing to achieve greater than 1gbps throughput but TBH I put in 4x 1gbps multipathing and can hardly go over 100MBps disk speed to a single SAN. Probably because I'm using SATA in a big RAID6 but for me the IOPS is more important so got SSD caching for that :)
You can also use SAS to connect hosts to SANs but tbh I prefer ethernet as the SAS HBAs are quite expensive and not scalable like iSCSI.
You should seriously consider using Hyper-V Server 2012, won't cost you a cent, and for what you want to do in your environment it sounds like a perfect fit
Spend the money that you were going to spent on VMware licensing to beef up your hardware or just save the money
The other cool thing you'll get for no cost with Hyper-V Server 2012 is Hyper-V Replica
Built in DR to asynchronously replicate any VM from one host to another, with no hypervisor licensing required, no charge of replication tax per VM etc
Thanks for all your feedback. Having looked at Hyper-V 2012 and watched a few youtube demos, it does look pretty good, especially the live-migrations and shared-nothing live migration. Considering we are a fairly simple Windows setup (6x 2003 Srv and 2 x 2008 Srv), the no cost Hyper-V 2012 may be the way to go. As I'm new to all this I haven't bought into everyone pushing me to VMware simply 'because its better and everyone uses it'.
I will continue my research but this certainly is looking more cost effective and suits our simple setup well.
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