I just read a CNET story, "Enterprise storage gets interesting again", which quoted a VM storage company exec as saying, "100 percent virtual deployment is a when, not an if, at this point. In the virtualized datacenters 20 years from today, all aspects of computing will be virtualized, including servers, networks and storage." It's tough to argue this. Analysts and consultants are putting server virtualization adoption at anywhere from 20% to 80% depending on the research and whether they were measuring systems, workloads or companies. The trend towards "virtualization as the default" is something we continue to hear from customers.
The downside, however, is the complexity. According to one survey, "...only about half of around 200 respondents find virtualized systems easier to manage or help them meet their SLAs." Virtualization has become another complex layer of 3rd party management added on top of the physical IT resources in the data center. It has spawned its own type of administrators (i.e. "VM Admins") as well as management frameworks. And, if you really love complexity, you can even add on an additional "Cloud" layer of management (director software, portal, API, licenses, etc.), to further abstract, your abstracted management!
So I agree that virtualization "is a when, not an if". But the "when" will remain a long way off until the complexity is addressed. What is needed is for server virtualization to become part of the server management, not yet another thing to install, license and manage. Just like how Storage arrays present volumes externally, while masking the internal complexity of cache memory, RAID levels, tiering, etc., servers will have to quickly get onto this same evolutionary path. The "when" of prevalent server virtualization will arrive when the virtualization is embedded within the server hardware itself.