Solution

The primary advantage of server virtualization is the ability to consolidate multiple physical servers into fewer host machines, each running several virtual machines. This reduces the overall hardware footprint, leading to lower operational costs (such as energy consumption and cooling requirements) and more efficient use of resources. Virtualization allows for dynamic allocation of resources like CPU, memory, and storage, making it easier to manage workloads, increase scalability, and ensure higher availability through features like live migration and failover. Why other options are wrong: A) Virtualization reduces the need for physical hardware by running multiple VMs on a single machine. B) Virtualization enhances management and scalability by enabling flexible resource allocation and workload balancing. C) While there may be some software licensing costs, these are typically offset by the savings in hardware and operational expenses. E) Virtualization increases flexibility, allowing VMs to be easily deployed and migrated across different servers without disrupting service.