As times passed by, virtualization was indeed a hit and the sales people eventually started realizing that by offering virtualization to the customers they would now start selling other data center components. SAN, fiber switches and multi cpu socket servers where now needed in such environments and even if they sold less servers they where still able survive in a changing IT world.
When companies started virtualization some people within IT departments where afraid that the number of positions at the IT departments would decrease as there would be less physical systems to manage. I also suspect that the number of people who had (almost) an erotic relationship to server hardware where larger then than now (on the client side there still seems to be people hugging hw, especially from that fruit company).
So what happened at the typical IT departments after they virtualized. Yes, less physical servers mean less work within the data center, but the number of operating systems to manage often increased at high speed. It was now so easy to setup a new system that the time it would take to manage these systems was not less than before at all. Server sprawl is a term that was coined to describe this problem. Most IT departments would not lay off all their people, but often people got assigned other tasks than before.
I'm still not sure what happened to the server huggers, but I'm pretty sure they're still around here somewhere.
With many new inventions there have been great expectations. When the printing press was invented, some people forecasted peace between nations as a result. When the telegraph was invented people could communicate over large distances and world peace was forecasted. When the telephone was invented people could communicate more easily over distances and again people thought world peace would be the result. ..and it was the same with the internet. World peace. However, it seems that these technologies alone are not enough. We also have a human factor as well that is quite important. And there's no doubt that the world has become smaller and smaller as each of these new technologies have evolved and it has totally changed they way we communicate.
We now see cloud computing as something that is on it's way into the IT world. I have not yet heard that it will lead to world peace, but I'm pretty sure that some people will get other positions than before.
In episode 95 of the Virtualization Security Podcast we have a discussion of how new technology can affect your job in the IT market.