This virtualisation gig is really starting to revolutionise they way we infrstructure bods use hardware. If you don't know what I'm on about you have probably been living under a rock - think VMWare.
Today I ordered and built a server for our new hosted app. I don't know where the server physically lives and I have certainly never touched it - plus I know that there are a bunch of other people also on the same hardware.
This to me looks like the future. Two years ago a hosted app had to be written in PHP, python or servlets or some other scripty kind of language that ISPs could easily manage. Not any more. You upload your own applications on to your own box and run them. Sweeeeeet. This was one thing that was holding back Tornado in a hosted sense but that seems to no longer be an issue - and over time I am sure will continue to be less of an issue.
It struck me that small ISPs will start disappearing soon. Large companies will have the financial clout to purchase monster boxes (think Sun monster machines, eg http://www.sun.com/servers/highend/m9000/get_it.jsp) On a box like that you could run hundreds (thousands?) of virtual servers.
Economies of scale. Big iron is going to make a comeback.
The best part is: if there is a hardware failure, just load the virtual server up on some new infrastructure, no reinstall, no drivers, no config - just copy and go.