The cost virtualizing resource intensive servers

Hi All,

we have been having a discussion at my office about if there a point when it is cheaper for a machine to be physical rather than virtual?. Because if it requires a large number of CPU cores and/or a large amount of memory, it works to reduce the maximum number of machines that the host can support potentially destroying the overall cost effectiveness.

Is there a "sweet spot" for CPU or RAM requirements that dictate a machine should be physical not virtual. What is it? How is it derived?

Is there a design rule or method, based on worked and priced out examples that enable us to figure out if we should choose to have a Physical Machine instead of a Virtual Machine?

thanks