I currently have a 1U server in a data center. I run my (mostly personal) DNS, mail, and webserver on it. It will be time to replace/refresh it soon.
When it is time for the new machine I am considering switching over from a physical machine running all services to VM model with each VM being relatively stripped down and running one major service (so if a vulnerability compromises a service only that VM and service would be affected instead of all of them). I want to use a free (as in beer) solution.
The machine would continue to be remotely-located, so while I'd have full console access when initially setting up the machine, I would only have serial console access (I have a networked serial terminal concentrator in the rack), though perhaps full console access via integrated, networked lights-out-management/console redirect hardware if the box I end up buying supports something like that).
Things that seem to come up a lot when reading about this sort of thing are Xen, KVM, and the free edition of vSphere.
I don't imagine I'd be doing very much creating/destroying/modifying of VMs. I envision setting them up and taking periodic backups, but that's about it.
So for this sort of use, what do people find to be the best free solution?