BIGGER does not necessarily mean BETTER
Servers like fast threads sometimes, and server applications these days usually need more than the 4GB of main memory
Do they? Let's not mistake Vmware and Xen needs with applications. If the 64 bit arm retains the power envelope of its 32 bit predecessor we will most likely see more physical servers or physical nodes in a multi-server chassis like the SeaMicro AtomSmasher. An arm server node in its entirety is likely to cost a fraction of the cost of the licenses for running the same workload on a Vmware partition.
So it depends whose market will arm/nvidia decide to eat. They may go for Intel's jugular and I honestly wish them luck on that one. They may however go for the low hanging fruit of re-physicalising the virtualised installations.