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See my response to another question here.
There are two major ramifications:
First, each VM has only part of the resources of the full server, which many not be an issue for web servers and other server that have high loads only rarely or at periodic intervals, but can be for other types of applications such as database servers.
Second, adding the hypervisor between the hardware and the operating system introduces an additional layer of software into the overall system. While this seldom adds much in the way of load, it can occasionally cause problems with applications that try to access hardware directly, or in environments where the software does unexpected things, particularly beta software or testing environments.