Earlier quoted context omitted.
Ah, VMware is the problem, that is explains it. Parties that care muchly about fine performance margins apparently need to be using Xen or KVM or Illuminos then.
Can't speak for the parent poster's company but the numbers don't match my experience with VMware many years back. It's possible they've had a sharp regression but we were maxing out gigabit ethernet and local RAID arrays in 2006.
For instance it's easy to make a benchmark showing huge throughput to any given storage solution (and many NAS providers sell on this basis), but your I/O might be terrible because to get that throughput you're maxing the CPU (etc.). Likewise, you can change your benchmark and show high I/O, but the throughput is 'terrible'.