1. Disaster Recovery: Virtual servers are hardware agnostic (they'll run on almost any hardware). This means that they're very easy to restore to another location (even your old server in the back room) :P, and since one VS Host can run multiple virtual servers, you can have one big machine handle offsite DR for your whole office (instead of one DR server per physical server).
2. Resource Consolidation: One VS Host can run multiple Virtual Servers. It's unfortunately very common to have one server get a hundred different roles loaded onto it in a small to medium business enviorment (SMB). We all know this is bad! Things always run better when you split up roles among multiple machines. Rebooting a print server for example, should not take down your file server! With Virtual Servers, you can have a dedicated virtual print server and a dedicated virtual file server running independtly on the same physical server.
3. Updating and Patching: Restoring a virtual server with it's system state in tact is unbelievably easy compared to a physical machine. For example; take a snapshot of the virtual server before installing all the Microsoft, Redhat or third party patches and reboot. If you don't like the patch update, you can revert back to exactly where you were before the update by simply restoring your earlier snapshot. In addition upgrading your hardware is very easy as nothing has to be modified or installed on the virtual server itself.
4. Testing & Development: Ever want to test a new application or some new drivers? Everyone does this, and sometimes we make more work for ourselves. The problem is maintaining and staging a test enviornment that's really a duplicate of our real network. With virtual servers, you simply copy the original virtual server you want to test to another physical host computer with virtual server host on it and test away. You can test all your changes here, and know exactly how they will work on your production network.
5. Cost Reduction: We all know the cost of energy is going up. I don't see that changing for the better. Running more load on a single server makes a lot more sense than running more servers with less load. Not only do you reduce your electrical costs, you also reduce your support costs. Less running hardware means less to break and less to repair. A side benefit for you is more time running your business and less time supporting it.
VS = Virtual Server