Windows 2008 includes a new ACPI (Advanced Configuration and Power Interface) setting called Processor Power Management (PPM) that allows the CPU to change its performance state to one that lowers power consumption. When looking at the big picture this is a good thing: Microsoft is doing its part by setting a default that helps the world consume less energy and limit pollution. My clients however, are generally not as concerned about world energy consumption as they are about the performance of their system.
The problem is that the default setting for PPM of 'Balanced' makes the performance state of the CPU 'Adaptive'. A CPU in this adaptive state will throttle core frequency back to save power. This comes at the cost of lower performance. When higher demands are placed on the CPU it is supposed to react quickly and increase its core frequency to address the increased load. This makes sense - when performance is not needed the CPU essentially rests and saves power, when high performance is needed the CPU switches to a higher core frequency and performs optimally but uses more electricity. Unfortunately, the CPU cannot react quickly enough under the loads we typically see in an ERP system's servers (Database, Application and Web) to suitably increase performance.
Changing the Setting
Update (6/30/2011): You should probably visit the Testing section below first to determine if the Processor Power Management setting is already being controlled by BIOS, making the change to the OS unnecessary. If PPM is already being controlled by the BIOS, go ahead and leave it that way. If testing shows that the BIOS isn't controlling, make the changes below and tell the BIOS to allow the OS to control PPM.
We need to change the power plan setting from the default Balanced to High Performance.
Open Control Panel | Hardware | Power Options. You may see the following:
Notice that the options are greyed out. Select 'Change settings that are currently unavailable' to enable the radio buttons.
Select 'High performance' and close Control Panel.
You still have one step remaining to fully enable the High Performance power plan. In most modern servers, the BIOS will have a setting that either gives the BIOS control of Processor Power Management or allows the OS to control PPM. We want to set the BIOS to allow Windows 2008 to manage PPM. The BIOS setting will be different for HP, Dell, etc. so consult your manual or just use your noggin. Then test.
To check whether your changes have taken effect is as simple as downloading the CPU-Z tool and checking the measured core speed against the known spec's of your CPU. What you are looking for is a measured core speed equal or greater than the CPU's potential speed.
Here's a system that has the High Performance setting properly enabled:
You can see that the core speed is greater than the OS-reported CPU speed. This is what we want.
Here is a system that does not have the Processor Power Management set to High Performance:
You'll notice that not only is the core speed lower than reported by the OS, CPU-Z also reports a much lower multiplier than expected. The multiplier for the tested CPU should be 23 but CPU-Z shows it to be only 12. You can find your processor's proper multiplier here: http://en.wikipedia.org/wiki/List_of_Intel_Xeon_microprocessors. You may also be able to find your processor's multiplier on http://www.cpu-world.com/index.html or by simply Googling your processor's model number (ex: Xeon E5-2620) plus the word 'multiplier'.
This is a system not properly configured for High Performance PPM.
Significant performance gains can be realized by changing the Windows 2008 default setting for Processor Power Management. It is recommended that you do so.
Update (6/27/2011): Information on changing this setting for a large number of servers using Group Policy is here: http://greg.blogs.sqlsentry.net/2011/01/ensuring-maximum-cpu-performance-via.html. Note that you will still need to update each machine's BIOS to allow the OS to control PPM.
Update (8/18/2011): More information on power management for VMware is in the comments.
PPM in Windows Vista and Windows Server 2008
Degraded overall performance on Windows Server 2008 R2 (Ya' think?)