I get it....
We use VMWare extensively in our organisation, the key is careful selection of what is to be virtualised.
VMWare player is a neat little toy, as is VMWare server. It is the ESX Server product that carries the advantage to the Enterprise IT.
Of course virtualisation will not save legitimately licensed organisations money on licenses. Nothing will if you want to remain legitimately licensed. Nor will it save money on systems admin, at the end of the day if you have the systems, regardless of format they still need administering.
We see significant hardware savings though, for example:
Looking at an enterprise server fleet, you will see that a lot of server hardware vastly exceeds the requirements of the application. This leads to a lot of unused capability in the data centre.
Lets say the average hardware cost of a 1u branded server to be $7k
For a good ESX host, you need a good robust multi core multi CPU lots of RAM server, lets say around $35k
We find that by careful selection of our virtualisation candidates, we can get one of these ESX hosts to run around 20 Virtual machines without getting too stressed. Essentially replacing 20 $7k boxes with 1 $35k box. Or in other words a hardware saving of $105k. Admittedly shared storage (Netapp or similar) and the VMWare licensing will eat in to that a little, but you still see an impressive saving.
Furthermore when you start to cluster your ESX hosts, you also add in a high availibility component. Store the virtual machines on a SAN, and they are accessible from any configured ESX host in the cluster. In the event of a hardware failure, or high resource utilisation, the VM's can be migrated to another host with a few seconds downtime.
Thats not even covering speed of deployment for new servers and the advantages for test and development environments.
The main point I am trying to make is that virtualisation does represent considerable cost savings for Enterprise IT - If it is deployed and utilised correctly. It is not the Swiss Army Knife that is going to fix everything, but like any other tool with correct applicaiton it can make life easier.