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Running multiple instances on one server

I have a problem in which my client is insisting to have three databases running simultaneously on a single machine. All the three databses will be in production mode with around 1 GB of data every year on each db, and with many reporting requirements using Discoverer, which again is a resource consuming tool. The configuration of the server machine (IBM brand), which has one database at present, is as under:

OS - Windows 2000
CPU - 2700 Mhtz Dual
Primary memory Cache - 8 KB
Secondary Memory Cache - 512 KB
Memory - 1 GB
Free Space - 62 GB

With the above configurations is it advisable to have three or four databses on single machine? What will be the affect on performance?
You can certainly have multiple instances running on one server. Without knowing any more about the data and the data access patterns, it is difficult to determine if the above server will handle the load. You'll have to monitor the load to be sure. Keep in mind that most of the resources on the server are shared resources among all instances. You only have 1GB of physical memory and all three SGA's, and all of the PGA memory for each server connection must all fit under this 1GB of memory. Since the OS is Windows, make sure that there is space for the OS as well. You don't want to exceed the limits of your physical memory. You'll also want to look at the disk usage. How many physical drives are present (not logical drives)? All of your databases will have to share these physical drives. So you'll have to balance the I/O load as best you can. It might be difficult with three running instances on one or two drives. You may have to purchase more drives if I/O contention results. Finally, monitor your CPU usage. You indicate that there are dual 2.7 GHz processors. That might be enough or it might not. Use Window's Performance Monitor (or Task Manager) to ensure that the CPUs are not highly active.

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