Physical hardware for testing, a thing of the past?

I am starting to question wether these days we need to even have physical hardware lying around to do testing on. I ask this question because I have been playing with VMWare Fusion on Mac OS X, and I love it. I have several images of different OS's that I can boot in a virtual machine to do certain tasks, mostly testing of software.

Normally I would have grabbed an install CD for my OS, walked up to one of the many machines I own, and installed the clean OS with the software and tested it. If I screwed something up badly I would start from scratch, no harm done. These days I do my testing after I create a quick snapshot of the OS as it currently stands, so if I screw up, I hit another button and it all gets undone. No more long waiting time to install an OS, quick snapshot and we are back to where we were.

I for myself have been trying to justify keeping the machines I have, especially since every single last one of them has been used because I needed machines to test something on, with Virtual Machines that has become a thing of the past and they are mostly neglected. One of them is still used for the lan parties at UAT, but that is just one HD, which I could pop into any machine with two interfaces and have it up and running. Thinking about it now, I could technically run that in a VMWare session as well without losing functionality by getting a second interface for my Mac OS X, and exposing that to the underlying Guest OS as well.

In a business environment I think VMWare machines would come in very handy for testing of new software that is about to be deployed. Is virtualization the way of the future in terms of testing? Or even for machines that have to do real work? Let me know what you think by commenting on this post.