For us the reasons to go virtual (since 2006 iirc), in no particular order
- reduce power usage and cooling
- less hardware to manage
- more efficient use of hardware
- faster deployment of new servers
- separation of applications (mainly a problem on Windows, applications simply don't co-exist in an nice way on the same server)
We're not a major player by any standards but we now have 10 hosts running a total of 380 vm:s. Lot's of room for more vm:s in there still but it's designed for redundancy, 5 of the hosts can fail and all vm:s can still be kept running on the remaining hosts.