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I am about to buy a new server to run VWware ESXi (Dell T320 w/25GB + RAID10). It will mainly be running a Linux host running web applications and a Windows file/database server. I plan to use AWS Storage Gateway to provide their file systems over iSCSI. Does SR-IOV offer material benefits for such a set up? The majority of network communications will be between the guest OSs (iSCSI). External communication will be at most 100mbit.

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up vote 2 down vote accepted

For VMware and your use-case, probably not. SR-IOV is handy for external networking, but the scenario you describe sounds like using the VMXNET3 virtual adapters and a separate local virtual switch would do the job.

Something like the following, where vSwitch1 is the storage network between virtual machines:

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It should be noted that SR-IOV is not just for network adapters. Storage adapters are also an interesting target for SR-IOV, although the setup depicted by the asker probably would not be able to benefit from this as well. –  syneticon-dj Mar 5 '13 at 7:20
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