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Thin-provisioning and over-subscription are related. Thin provisioning is a method for optimizing storage by not allocating physical storage to a virtual machine until it is requested, by virtualizing storage so that virtual machines save files to virtual drives. In this manner, you could tell a virtual machine that it has 500gb of available storage, but the server may only need 200gb today, so only 200gb is used. If that storage volume is hosted on a 2TB RAID, rather than assigning up 500gb up front, it still has 300gb of that available to use with other virtual machines that may request it. The process of having multiple virtual machines share this 2TB RAID is called over-subscription. While the cumulative amount of storage assigned to all the virtual servers may currently exceed the physical amount installed, they may very well only need a percentage of the actual total space.
What makes this dangerous is if you have an influx of new data (Christmas orders, or perhaps a database scripting bug) which would then cause your storage requirements to radically increase. As long as you're doing a good job of managing your storage use and planning for adding additional drives to the array (you're using an ISCSI SAN I hope), this should not be an issue.