I work for a small company with a .NET product that was acquired by a medium sized company with "big iron" products. Recently, the medium-sized part of the company acquired another small company with a similar .NET product and management went to have a look at their technology. They make heavy use of virtualization in their production environment and it's been decided that we will too.
Our product was not designed to be run in a virtual environment, but some accommodations can be made. For instance; there are times when we're resource bound due to customer initiated processes. This initiation is "bursty" by nature, but the processing can be made asynchronous and throttled. This is something that would need to be done for scalability anyway.
But there is other processing that we do that isn't so easily modified because we're resource bound for extended periods of time.
How do I convince management that heavy use of virtualization is probably not appropriate for us?
If I were your manager, and heard your argument (above), I'd assume that you're just resistant to change. I'd challenge you to show me the data. You haven't really made a case against virtualization. You say that your product "was not designed to be run in a virtual environment". You're in good company, very few apps ARE designed that way. It usually "just works". And if it's too slow, they just throw more resources at it. If they need to move it, make it fault tolerant, expand or contract, it's all transparent. Poorly-behaved apps can be firewalled from other environments, without having to have dedicated hardware. etc., etc.,. What's not to like about that?
You should prepare a better argument, backed up with data from testing. Or you should prepare to be steamrolled by an organization with a lot of time, $$$, and momentum invested in (insert favorite technology here).