VMware version required for shared-nothing vMotion

I do a lot of VMware consulting work and I'd say that the percentages are closer to 80% of the installed base use high availability shared storage (FC, iSCSI or high end NAS) and a lot of my clients are SME's. The key factor that I've found is whether the business treats its server up time as critical or not, for most businesses today it is.

You certainly can run very high performance VM's from direct attached storage (a HP DL380 G6 with 16 internal drives in a RAID 10 array would have pretty fast disk IO) but if you are building a VMware or any other virtualized environment to replace tens, hundreds, or thousands of servers, then you are insane if you aren't putting a lot of effort (and probably money) into a robust storage architecture.

You don't have to buy a high end SAN for the clustering functions - you can implement these with a fairly cheap NAS (or a virtualized SAN like HP\Lefthand's VSA) and still be using certified storage. However if you are using shared storage and it doesn't have redundancy at all points in the SAN\NAS infrastructure then you shouldn't really be using it for much more than testing. And redundancy is (at a minimum) dual (independent) HBA's\storage NICs in your servers, dual independent fabrics, redundant controllers in the SAN, battery backed cache\cache destaging, redundant hot swappable fans and power supplies etc, RAID 5\6\10\50 and appropriate numbers of hot spares.

The real live difference between your systems is that if one of your standalone systems catastrophically fails you have a lot of work to do to recover it and you will incur downtime just keeping it patched. With clustered SAN attached systems, patching the hypervisors, or even upgrading hypervisor hardware, should result in zero downtime. A catastrophic server failure simply brings the service down for the length of time that it takes to reboot the VM on a separate node (at worst) or if you have Fault Tolerance covering those VMs then you have no downtime at all.

There are three components you need to consider;

1. ESX Licences - ESXi (not ESX) is free but limited when free, you can't give VMs the full 8 vCPUs, don't have HA, FT or DRS functionality etc. but it works just fine with or without shared storage. If you want these functions it's going to cost.
2. vCenter - this management software costs but is the only way to make two or more ESX/i hosts work together to provide HA, FT, have DRS functionality etc. Note that the ability to live migrate guest VMs from host to host requires shared storage.
3. Shared storage - without this you can't live migrate from host to host or support HA.

So really it comes down to your downtime requirements, if you NEED HA, DRS, vMotion, FT to increase your service uptime then you need ESX licences, a vCenter licence and shared storage. If you don't need these functions you don't need any of these extra-cost items.

Oh and there are free backup solutions for unlicenced hosts, such as GhettoVCB.