ime non-vm servers are an enormous win over ec2, and probably vms in general. A previous employer moved a large data processing pipeline from ec2 to softlayer; we saw costs fall from ~$100k/mo to high $40k/mo while tripling the throughput for roughly a 6x perf boost.

The one area that this announcement doesn't address, however, is contended networking. Rack local servers with a 2G (or ideally 10G) full port-to-port simultaneous switch did amazing things for our app's performance. When you're looking at whole-app performance, you're sensitive to contention on all of cpu, io, and networking. Hadoop is particularly sensitive to contended i/o, but secondarily sensitive to networking.

edit: s/big data/large data/ -- people who say bigdata are tools