I’m not sure I follow that server is useless. In the SMB and Enterprise, it’s still required for a domain/exchange, user management, software distribution, etc.

Yea, it can be virtualized, and is, even in SMB. It’s pretty standard to run a VMware host even there - it’s a better cost against utilization. More importantly, virtualized server provides better uptime, better load balancing/management, a much better backup process, and brings a bit of disaster recovery capability to the SMB space.