You will have to upgrade to 3.11 before you upgrade to 4.x, also be aware that 4.0 is the last version that supports a 32bit OS. When you upgrade to 4.1.0 you will run the installer first on the the server that will house the flow storage, then you will run the installer again on the main Orion server and point it to your flow storage server. During the upgrades the NPM poller will be down. How long the poller will be down depends largely on you environment. Give your self a couple of hour upgrade window. I have attached the upgrade path link below.
I'm finding heaps of people not upgrading to NTA 4 or 4.x because the requirement to have another server to run it. Not sure if this is another SQL license server whatnot. If someone can clarify.
Can it also be a VMware server?
the NTA database is not a SQL server and the migration to NTA4 is so worth the move.
It is much quicker. Since the upgrade we have tripled the amount of data we store because it no longer impacts our SQL servers.
Definitely go to 4 (4.1 now). The install still gives you the ability to install on your primary poller if you have no other option, but don't! Be sure to install the NTA on your new VM first and choose the install for a flow storage database. Then, go back to your primary poller and run the NTA install and point to the new VM location. It's a simple install and will migrate all of your data within the procedure.
I agree with mcam it is worth it. It not only increases the speed of NTA but also the speed of your other Orion products because NTA is no longer writing to the database. It does not use a SQL license, it runs on a drive on the new server. You will partition a drive on the server and point the NTA Netflow install to were you would like the flow storage to reside. Solarwinds does prefer physical servers but the NTA Flow storage server can be virtual.