It's not just a buzz word that is floating through out the media and conference world. Virtualization is big for two reasons.
On the data center side, power (and collong) is becoming a real issue. Many data centers are bottlenecked by power limitations. (See what Google and Microsoft are doing about it!). It used to be space back when a box was 7U. Now everything is 1U.
On the app side of things, virtualization means less hardware costs upfront. Most companies like having the server where they can see it. But as IT talent gets more expensive and harder to retain, companies will be looking to move to a DC. But Data Centers don't want shelves with white boxes and Joe Business doesn't want to buy a new one. Plus will I need to firewall that off? Do I need an IDS? Do I want shared bandwidth or just my own feed? Virtualization and Managed Services. You are selling Peace of Mind; Remote Hands; Talent on-Demand.