What about setting up a little datacenter at home ?
That was my decision several months ago, when I started to think about building my “own cloud” at home.
For that, you need one ĥysical server, and a good Linux distribution running a virtualization environment. I chose KVM over Ubuntu.

Installation

As I installed that some time ago, I selected Ubuntu server 10.04 distribution.
Not really a “slim” distribution, but I’m used to Ubuntu features and issues. Moreover, the .deb package mechanism is simple, and this is what I was looking for… My own cloud, but with limited efforts… 🙂

Once Ubuntu server installed, with a fixed IP address (“good practice” in such cases, I think), you need to install additional packages to get KVM up and running.

Software to install

From a terminal prompt enter:
sudo apt-get install qemu-kvm libvirt-bin ubuntu-vm-builder

After installing libvirt-bin, the user used to manage virtual machines will need to be added to the libvirtd group. Doing so will grant the user access to the advanced networking options.
sudo adduser $USER libvirtd

You will also need utilities to manage the Network interface, especially the bridge notion:
sudo apt-get install bridge-utils

Setup bridge configuration for network interface

For that, you need to modify your host network interface parameters (file /etc/network/interfaces):

# This file describes the network interfaces available on your system
# and how to activate them. For more information, see interfaces(5).

# The loopback network interface
auto lo
iface lo inet loopback

# The primary network interface
#
# Commented to remove DHCP
#iface eth0 inet dhcp
#
# Added BR0 for bridging
auto eth0
iface eth0 inet manual
auto br0
iface br0 inet static
	address 192.168.0.3
	netmask 255.255.255.0
	network 192.168.0.0
	broadcast 192.168.0.255
	gateway 192.168.0.250
	bridge_ports eth0
	bridge_stp 0
	bridge_fd 0
	bridge_maxwait 0

(of course, adjust to your own parameters, such as subnet, gateway, “normal” interface – eth0 in my case – and bridge interface to create – br0 in my case)

Verify Installation

You can test if your install has been successful with the following command:

$ virsh -c qemu:///system list
 Id Name                 State
----------------------------------

Additional optional software

If you want additional scripts (recommended) to support your VM management, install virt-install which is part of the python-virtinst package. To install it, from a terminal prompt enter:
sudo apt-get install python-virtinst

Note that this will install additional packages: python-libvirt virtinst

In order to get a GUI, you should install Virtual Machine Manager
The virt-manager package contains a graphical utility to manage local and remote virtual machines. To install virt-manager enter:
sudo apt-get install virt-manager

Create virtual machines

There are plenty of ways of creating virtual machines:

• via the GUI (virt-manager)
• via the virtual shell (virsh)
• using special commands (virt-clone,…)
• directly modifying XML files (hard times !!!)
• …

At first, I must admit I used the GUI.
It is a simple interface (that you can run on your laptop, as it allows remote connection to the hosting server via SSH)
When you start it, you get a usual look & feel (especially if you are already using other Virtualization environments, such as VMWare or VirtualBox).

The only issue I faced using this GUI was the network setup.
I wanted to create VM used to deliver services within my personal network. As such, I wanted them to use a fix IP Address.
I could have setup static IPs in my DHCP server, but I wanted to do it “old fashioned-way”: setting up fix IP addresses within the guest OS.
By default, this is not possible through the GUI.

Here is the workaround:
Once a Virtual Machine is created with the GUI, and before starting it up, you will need to modify its settings to get the bridge up and running.
Edit its xml configuration file (directory /etc/libvirt/qemu) and replace the network section (starting with ) with the following:

    <interface type='bridge'>
      <mac address='52:54:00:60:94:1f'/>
      <source bridge='br0'/>
    </interface>

(of course, adjust to your VM mac address, and your bridge interface created in previous step)

Then, you can start your VM that will be granted a network interface bridged on your real physical server network interface…

A part from that, just… enjoy !