One of the current buzzwords of the server world is "consolidation." Depending on who you talk to, this means anything from using really big servers running virtualization software (such as VMware) pretending to be lots of smaller servers, to lots of smaller servers packed into small spaces (blade servers, et al.) that can be used to virtualize all sorts of environments that go across hardware boundaries.
Obviously, this difference also represents the difference between the utility computing model and the traditional approach to providing server resources. While there are some situations where the models are in direct competition, they are, for the most part, complementary technologies. Utility computing isnt for everyone, nor are huge monolithic servers; the goal is to meet the business needs of the computing environment in the most efficient manner, regardless of technology.
Theres an interesting transition taking place on the blade server side of the market, though its not an unexpected one. Since one of the primary features of the blade server concept is flexibility, it shouldnt come as a surprise that more and more high-end networking and storage features are beginning to be integrated into the blade server model.
Networking was the first technology to be integrated. Since you already had to deal with the issue of building a network within the blade server enclosure to permit communication with the independent server blades, it was only natural that high-performance networking technologies should be incorporated. Gigabit Ethernet connections were just the first step, as vendors are starting to announce 10 Gigabit Ethernet switches offered as blades for their server enclosures. So with the addition of port connections, you are now able to buy blade servers that include the core architecture of your high-performance switched Gigabit Ethernet network.