I used to run virtualized file server. Here is the trick how you can present local disks as raw devices to one VM (running the file server): http://fojta.wordpress.com/2010/05/02/rdm-raw-disk-mapping-with-local-disks/
. Note: this was written three years ago.
Today I would not do it. There are following problems:
- Single Point of Failure: you probably have quite a lot of (valuable) data on the file server. If you have problem with the the server hardware (especially with the disk controller) you cannot access the data (and in worse case there could be data corruption). If you need to reboot the server (when you upgrade the hypervisor, or HW) again no access to your data, your firewall is not working so no internet access, etc.
- Running a lot of disk in standard case makes lot of noise, heat and has high power consumption. The heat was the biggest problem for me as during summer my ventilated closet got very hot.
So what am I using today?
I have dedicated Synology DS713+ and Iomega IX4-200d storage arrays. Especially the Synology is great device - quiet, efficient, cool, can run apps, act as file server and obviously also as shared storage for ESX (NFS or iSCSI). Then I have couple very quite, low consumption, diskless servers that act as ESX cluster (with vMotion, DRS, High Availability ...). I understand that this is mostly overkill for file serving but I am an IT professional who tests various products on that rig. One node is Shuttle SZ68R5 with 32GB RAM, extra 2 port Intel NIC - booting from USB flash disk and datastores are presented as iSCSI from Synology.
As said Synology makes great devices of various size - from 1 disk up to 24 all with the same firmware (DSM). Some are expandable so you can grow and do not have to make all the investment up front. You can run apps on it (mail server, DHCP, DNS, video surveillance, web servers, ...). And they are really easy to use.