One of the very first questions presented to the Virtualization Architects when planning and designing a new deployment, for as long as I have been working with virtualization technology. To scale up or scale out, that is the question and philosophy that has flip flopped back and forth as the technology itself has improved and functionality increased.
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When I first started with virtualization, the only option you had at the time was single core processors in the hosts. Scale up or scale out was the hot debatable topic when designing your infrastructure. On one side of the coin the idea was to scale up in that it was best to get a few of the biggest servers you could find and load them up with as much memory and processors that you could fit in the box. The end result were some very expensive servers able to run a lot of virtual machines for its time. The other side of the coin presented the idea that it was better to scale out with more, smaller servers to make up the cluster. I have worked in both type of environments and attitudes over the years and as for me, personally, I aligned myself with the scale out philosophy. The simple reason for aligning with the scale out group was host failure.