No, you're pretty close to on target.
Where I work now, we had a whole mess of servers running, and a power bill around $7,000/month. When I inherited the mess, we started looking hard at what each one was doing. Many were just on because "they've always been on". Some did trivial functions and had no load on them.
Rather than reinventing their horribly designed wheel, I went the VM route. I built out a couple new servers (mostly gaming parts in a mid-tower case) with 6 3.8Ghz cores, 16TB storage and 16GB RAM, for about USD 1,500/each. I use VirtualBox for my VMs, because I've been very happy with it over the last few years. And yes, I've tried the others.
VMWare has a migration tool, to move the running OS from physical hardware to a VM. A little black magic later, and all the low usage machines were moved. It made quick work of it. I did the migrations remotely, shut down the source machine when I was done, and then had someone local to the servers go and unplug them.
I should clarify at this point. The "Low usage" servers had things like the accounting software, Active Directory servers, miscellaneous file servers that people just *HAD* to have, and the mapped drive letters couldn't change. For some of the applications, I did not have the option for installing them on a new server. Disks were misplaced or some special technique to get them to work left the company with previous employees.
All in all, the two machines that I set up are handling the job very nicely, and have plenty of resources for other tasks.
There was some discussion of moving the mail server over, which I vetoed. Mail servers thrash away at ditching spam, processing inbound and outbound queues, and dealing with the horrendous user requests (hey, lets search our 10GB mailbox for the word "A").
We went through a cycle of pulling network cables to machines that didn't look like they were doing anything, and letting them sit for a week. Guess what? Most of them weren't doing anything.
One advantage to this was memory usage. I was concerned that some of the old servers wouldn't survive a reboot. I also priced memory and found that a decent upgrade would cost several hundred dollars each. It's hard to justify that kind of money for machines that people barely use.
I was lucky in that the machines were single or dual core machines with up to 1GB RAM, and a primary drive of around 20GB. Ya, that old. I gave the VMs more memory as needed. Some of them were swapping horribly because they really needed about 1.5GB RAM. Voila, swapping problem solved.
The users are happy that the machines are much quicker now. I'm happy that I can log into two machines and have the "consoles" in front of me.