currently doing a proposal for a company that uses 4 servers. All are Dell PowerEdge SC1430s

The company IT guy thinks an HP blade server [4 blades] and or one big hefty server running MS Virtual Server using 4 virtual servers would be cost effective. There is plans to add another file server in the future [3 years]

I on the other hand think they ought to stick with the single instance.

How does virtual server scale with 4 or 5 servers both in cost and power savings?