Surly we should be asking exactly is driving the demand for high density computing and in which market sectors and is this actually the best technical solution to solve them problem. I don't care if IBM, HP etc etc want to keep selling new shiny boxes each year because they are telling us we need them - do we really? ...?
Perhaps not. But until projects like <http://www.lesswatts.org/> show some major success stories, people will keep demanding big blade servers.
Disagreed. Customers who don't run datacenters general don't understand the issues around high density computing, and most enterprises I deal with don't care about the cost. More and Faster is their vocabulary.
If you move all the entreprise services onto virtual servers then you can free up space for colo/hosting services.
We do quite a bit of VMWare and Xen, both our own and our customers. We have found power consumption still goes up, simply because there is always a backlog of the need of resources. In other words, it's almost "if you build it they will come" relates to CPU cycles as well. I have never seen a decrease in customer power consumption when they have virtualized. They still have more iron, with a lot more VM's.
You can even still sell to bulk customers because few will complain that they have to deliver equipment to three dara centers, one two blocks west, and another three blocks north. X racks spread over 3 locations will work for everyone except people who need the physical proximity for clustering type applications.
Send me those customers, because I haven't seen them. Especially the ones with lots of fiber channel and InfiniBand.