When planning the migration of workloads away from Windows Server 2003, you’ll need to choose whether those migrated workloads will be deployed on “bare metal hardware” or whether they will be virtualized.
Windows Server 2012 was designed with a “virtual first” approach to deployment. This means that the designers of Windows Server 2012 (and 2012 R2) have worked off the assumption that the vast majority of deployments for the operating system will be virtual rather than physical. As running Windows Server as a virtualized workload 11 years ago was a lot less common, Windows Server 2003 was not designed with the assumption that most of the time it would be run in a virtual machine.
While many organizations do run Windows Server 2003 as virtual machines, a large number have their Windows Server 2003 servers deployed on physical hardware. This means that when considering the migration from Server 2003, they need to also decide whether they’ll make the jump from running a workload on bare metal to running a workload on a virtual machine.
For the most part this decision is straightforward. You should virtualize as many workloads as possible. Virtualization brings benefits in terms of portability, backup and recovery, and deployment that are simply not possible with physically deployed workloads.
There are scenarios where you should avoid virtualization. These generally occur when a workload cannot be virtualized, such as when there are unusual hardware or performance requirements, or when there is specific advice to that you should avoid virtualization provided by application vendor.
As is always the case when migrating from a physical to a virtual environment, make sure that you test that the workload functions as expected before you perform final cutover.