From Jonathan Schwartz:
[...] if you can double server utilization via Solaris Containers or VMWare, people don't buy fewer computers - they buy more. The value of innovation, at least to our core customers, is growing so fast that if the price declines, the overall return (value/price) goes through the roof - encouraging a feedback loop.
The corollary to this is that if you're not willing to cannibalize your own business (by improving value/price, whether through better performance, better utilization, or lower price) your competitors will do it for you.
And Jonathan, it's VMware :-).