Servers use only a small percentage of their capability at any time yet applications may clash with other server software resulting in multiple servers being required. Virtualisation is tricking software into thinking one server is multiple servers and therefore utilising this unused processing power.
The VMware hypervisor boots from a small internal storage device and so long as all hardware components are on the approved compatibility lists is extremely reliable. Advanced features such as load balancing, bare metal backup and high availability are only available with the vSphere commercial editions but the hypervisor is absolutely free and has everything a small to medium business needs to virtualise their servers.
vSphere unlocks the potential of virtualisation for larger scale environments were resources from multiple servers can be pooled into resource groups maximising the number of virtual servers that can be created on physical hardware. Servers can be dynamically started and shutdown on demand reducing power consumption and failover without data loss should some servers become unavailable by transferring control to other resources.
For small businesses, the free hypervisor is fine and using open source UNIX / Linux based operating systems and software, investment in a single server can potentially fulfil all of small business server and business application requirements with no license costs whatsoever.