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Why keep applications and data on different hard drives?

My company just purchased a Dell PowerEdge 2600 server. We are going to use it as an internal Web server and application server running Terminal Services. We are running in a workgroup, not a domain.

The question: People I've talked to recommend that the hard drives be partitioned so that one drive holds the applications and one drive holds data. Why is this? I am now setting it up at work, and I mentioned this to my supervisor who opposes this approach. Is it recommended to be set up in this way, and if so, why?

The reasons are usually to keep user data on a district drive for quick and easy backup. Also, by keeping user data on a different drive than the OS and the applications, you usually also avoid sharing the drive with the paging file. User data has a way of expanding greatly over time, consuming all available space. So by restricting it to a different drive than that used by the system itself will keep possible resource contention issues to a minimum.

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