The economics of higher utilization, whether achieved with a hypervisor or application server, are straightforward and intuitive. If we have two applications that each typically need two nodes in their cluster but occasionally need three, we can set them up to dynamically expand to a shared third node, thus supporting the overall workload with five servers rather than a statically provisioned six. With more applications sharing servers, one can in many cases cut in half the amount of hardware required. And the savings are not just in the reduced upfront cost for hardware - it's the ongoing operational cost of monitoring, patching, upgrading, and diagnosing servers, operating systems, etc.
Application server clustering and server virtualization are in fact complementary mechanisms operating at different levels of the stack with important potential synergies. Server virtualization alone will ensure that each server runs as close to full utilization as possible. Application server management alone will ensure that optimal data caching, load-balancing, and cluster sizing is set. When application server management has at its disposal the additional capabilities of the hypervisor - such as the ability to bring additional cluster nodes up and down nearly instantly and the "live migration" ability to move running applications among different virtual servers, a much finer-grained dynamic optimization can be achieved. Beyond the reduced hardware and associated operational costs, deployment of applications becomes much more efficient when their stacks are pre-packaged as software "appliances" that can be instantiated rapidly on virtualized infrastructure.
Whether or not you have already virtualized your production environment, there are important efficiencies to be gained by effectively using the clustering and management automation capabilities of your application servers. Which technology you use is of course important. We have seen customers achieve 30 percent to 50 percent higher efficiencies and delay incremental hardware purchases by up to a year, and we've seen customers reduce operational staff to several administrators supporting hundreds of applications. Bottom line: Have another look at your application server as a high-impact opportunity to increase data center efficiency.