I absolutely agree with this point of view. To achieve higher density automation it's necessary to have standard service offerings that can be repeatedly delivered.
Your evaluation of automated tools is a vital part of virtualization success, but be careful not to overlook the need for structured processes. The adoption of virtual technologies significantly increases complexity, which in turn mandates process refinement. Forrester recommends that infrastructure and operations pros should avoid virtualization-centric process models that don't mesh with other processes. While the notion of "ITIL for virtualization" is horribly misguided, a wiser approach is viewing virtualization as a catalyst for ITIL adoption.
But "It only takes 10 minutes to create a VM," says the typical VM admin. That because they are not looking at the whole architecture, design, etc, etc process. So yeah, removing 5 minutes from a 6 week process it's really not that exciting.
And as Glen writes, you need to look at process for physical, virtual, and cloud. Sorry VM only is not going work.
Heck the biggest issue I dealt with today is that I need more infrastructure to build my private cloud than I expected. My boss asked me, "Can we run it in the cloud?" Hmm well, no. This layer wants physical, then we can virtualize the rest.
And without a clear process supported by workflow, it's tough to get to automation - the ultimate goal.