How are my servers and drives distributed between physical hosts?

When you create a drive, it is allocated on a randomly chosen host with sufficient free space.

When you start a server, our system prefers to place it on the same physical host as its drive(s). If this is possible, the server can directly access the underlying physical disk. Otherwise, if the host containing the drive is already too busy, the server will be started on a nearby host and it will access its storage by peer-to-peer iSCSI over gigabit ethernet.