Hi Ira Joseph Actub,
Welcome to the Microsoft Q&A Platform! Thank you for asking your question here.
Nested virtualization is a feature that lets you run Hyper-V inside a Hyper-V virtual machine (VM). Nested virtualization can be used for testing and development purposes. It can assist with virtualization training, providing guest virtualization to end users, and deployment testing of virtual clouds. Generally speaking, Azure nested virtualization is suited to instances where running multiple hypervisors on the same host server might be beneficial. For example, Nested Virtualization can be useful for:
- Running applications or emulators in a nested VM
- Testing software releases on VMs
- Reducing deployment times for training environments.
- Using Hyper-V isolation for containers.
- If you need to run older, unsupported OSs in Azure, if you need to provide a training environment for Hyper-V or if you need control over the virtualization host itself, nested virtualization might the right solution. The following diagram shows Hyper-V with Nested Virtualization enabled. In this case, Hyper-V exposes the hardware virtualization extensions to its virtual machines. With nesting enabled, a guest virtual machine can install its own hypervisor and run its own guest VMs.
Supported scenarios Using a nested Hyper-V VM in production is supported for both Azure and on-premises in the following scenarios. We also recommend you make sure that your services and applications are also supported. Please refer : https://learn.microsoft.com/en-us/virtualization/hyper-v-on-windows/user-guide/nested-virtualization#supported-scenarios
- Nested Virtualization isn't suitable for Windows Server Failover Clustering, and performance sensitive applications. We recommended you fully evaluate the services and applications.
- If you use nested Hyper-V VM in production, it is recommended to fully evaluate whether the services or applications provide the expected behavior.
While nested virtualization can provide flexibility, it is essential to note that it can also be more expensive than simply deploying individual VMs.
- The base VM used for nested virtualization typically needs to be a higher-tier instance due to the additional resource requirements of running multiple hypervisors. However, the cost can vary based on the VM sizes and configurations you choose.
- Licensing Costs: Each nested VM may require separate licensing, which can add to the overall expense. https://learn.microsoft.com/en-us/azure/lab-services/concept-nested-virtualization-template-vm
If you have any further queries, do let us know.
If the answer is helpful, please click "Accept Answer" and "Upvote it."