Deploying hosted applications - boxes are bad

I have used hosting providers for many years now and before that worked with rooms full of computers to serve various customer applications. This is one of the first things where I saw the huge value in outsourcing and the value that shared infra-structure brought to customers, but I want a lot more than is being provided today.

We have come a long way in managing the infrastructure for hosting applications. However the hosting model is still tied to the model of boxed cpu's. Blades are great and racking and stacking has been a great way to go for creating cheap scalable architectures. We are however a long way from the ideal case. The ideal case is where I agree with the hosting provider the high level architecture and then push software to the specific part of the system architecture and pay for an SLA and usage. Both SLA and usage are complex numbers to work out but the degrees of freedom they introduce should make it easy to develop innovative and fair pricing models.

We are a long way from this as the software tools we use to develop are also locked into the box model. This is not surprising as commercial tools are priced by the box. However open source tools do not have this limitation. Another way to look at this is from a virtual machine - why should the JVM or CLR be tied to a box should it not manage resources for the application and demand more resources as demand increases?

Global computing projects have been leveraging this for years but each application has been custom designed is it not time for this to become a standard part of the network?