Too many databases


   I am using drupal for my clients website, and was thinking is it possible to host all ( about 500) of them on the same server(maybe VPS or dedicated).
   Here is the situation..... Each clients website has a database with about 50 tables each, all the databases are small in size about 2-5 MB .... and the websites are low traffic websites with say.. 50 hits/day on avg.... that means about 2000 queries/db/day ..... (avg 40 queries per hit)....

  Wanted to know if it is possible to have so many databases about 500 on the same server?

  what are the things that i should look into if i should make this happen?