Dedicated SQL instance vs multiple database same server instance Looking for best practice advice for a sprawling network. I inherited a bunch of SQL servers. The practice has been to just stand up a new VM instance any time a database was needed or add a new SQL instance for every database. The administration challenge is huge so was hoping to hear some feedback on approach. 
I guess the simple question is, would it be better to run multiple instances per machine or 1 instance with multiple databases assuming licensing is not an issue, security and compatibility can be easily grouped and managed (very small user base, very small lightweight databases)?
assuming licensing is not an issue, security and compatibility can be easily grouped and managed (very small user base, very small lightweight databases)


You already have addressed the concerns.

IMHO, depending on the VM capacity (memory, CPU and disk space), you should consolidate databases to one instance.

This gives you advantage of managing one instance wherein you can have different rules for different databases - e.g. maintenance (index rebuilds, reorgs, stats update, backup schedules) etc depending on their criticality.

When your database size and usage increases, thats the time to move out the heavy used ones out of the instance on a different VM.

Make sure you have proper Disaster recovery inplace e.g. use logshipping/AlwaysON, etc so if the VM crashes or fails, you can failover the databases to secondary server.

Also, refer to my answer for 


  Which is better: one database per application, or just one database?.