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Consolidation of computing resources is a response to server sprawl, a situation that occurs when under-utilized server take up more physical space and consume more resources than the workload jusifies. Using consolidation, you can convert your physical computers into virtual machines, which can provide cost savings and more flexibility in your IT environment. 
Consolidating an Enterprise
You can recreate a physical computer as a virtual machine that runs in exactly the same way as the physical computer did. You can select any number of physical computers and convert them into virtual machines to consolidate your enterprise. The consolidation process includes the following steps (for vmware only): 1. Discover the physical computers in your organization 2. Analyze the workload of each discovered computer and identify the computers that are good canidates for virtualization. 3. Convert the physical computers to virtual machines  Converting a Physical Machine to a Virtual Machine
Use Vmware Converter to convert your physical computers to virtual machines. Vmware Converter converts Microsoft Windows-based physical computers and third-party image formats to vmware virtual machines. Vmware Converter copies the data on the hard disk of a physical source computer and transfers that data to a target virtual disk (the new cloned disk). Then the migrated operating system is adjusted so that it can function on virtual hardware. Vmware Converter outputs a completely new virtual machine based on the dource physical computer. The migration process is nondestructive, so you can continue to use the original source computer. Source: Vmware
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