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My current setup is Ubuntu Desktop, running Apache + MySQL + PHP stack. I use this image to host my small website to the outside world.

I want to now run a virtual machine on the box, that will act as the FreeNAS box for my internal network. This sounds like a bad idea if the website gets hacked/attacked. Should I just give up and grab a dedicated machine instead? Can I instead virtualize the web server and NAS side by side on this machine?

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Your virtual machine, if properly isolated from your web services, wouldn't likely be vulnerable to attack unless your entire machine / root account were compromised.

That said, if you're concerned about data performance/reliability/resiliency on the NAS instance, you're going to find that running your NAS off of a virtual machine with (unknown) specs is probably going to cause you more headache than it's worth if you're hosting existing server-services on the host OS.

If your specs on the existing desktop are less than spectacular, you'd be better too obtain a new dedicated box for your NAS. If your specs are high-end, you may want to consider a hypervisor solution (like VMware ESXi) and virtualize both your web server and your NAS in isolation on top of ESXi.

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ESXi was a thought, thanks for the explanation. My box is a consumer grade CPU (AMD A10), 8GB RAM, and a 350GB spare spin drive by Western Digital. If performance is a concern, it sounds like I should just save up and get a dedicated 1U NAS. – Erik Nov 4 '13 at 18:04
    
You can find some pretty affordable 5-disk ones out there -- consumer grade of course, but still not super pricey. Good luck! – brandonscript Nov 4 '13 at 21:21

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