Observations from Running SQL Server 2008 in a Hyper-V Environment

• Hyper-V guest virtual machines are limited to a maximum of four CPU cores; therefore, you should run SQL Server within Hyper-V guest virtual machines only if your workload performance can be satisfied by no more than four CPUs.
• When compared against native configurations with comparable hardware resources, the same throughput can be achieved within a guest virtual machine at a cost of slightly increased CPU utilization. It is possible with Hyper-V to over-commit CPU resources when the total number of logical CPU cores configured across all guest virtual machines is more than the actual number of physical CPU cores available on the server. In these cases, we observed more CPU overhead and performance overhead when we ran SQL Server workloads. Proper hardware sizing is critical to SQL Server performance. You should ensure that cumulative physical CPU resources on a server are adequate to meet the needs the guest virtual machines by testing your workload in the planned virtualized environment
• Networking-intensive workloads will see higher CPU overhead and thus more performance impact.
• The information captured so far is specific to performance considerations; for your deployment, take functional considerations (i.e., supported configurations, options to achieve high availability, and so on) into account. There is more information in the appendix section of the paper (link below), which covers general Hyper-V functionality and current support policies related to running SQL Server within Hyper-V configurations.
• We found that there was minimal overhead of I/O performance when running SQL Server from within a guest virtual machine. Pass-through disk configuration provided the best I/O performance; however, we observed minimal overhead when we ran using fixed-size VHDs. The decision of which storage configuration to use should be made based on what makes sense for the particular deployment; virtual machines using VHDs are easier to move around than pass-through disks.
• For consolidation scenarios, the amount of storage resources available as well as the scenario will drive your decision. In our testing, we found acceptable performance in both the shared and dedicated configurations. In either case, you should size your storage with your workload and response time requirements in mind. Always follow best practices with respect to the underlying storage in Hyper-V environments, just as you would with any SQL Server deployment. For more information, see Predeployment I/O Best Practices for SQL Server.

These recommendations are from the whitepaper "Running SQL Server 2008 in a Hyper-V Environment" which is available for download here: http://download.microsoft.com/download/d/9/4/d948f981-926e-40fa-a026-5bfcf076d9b9/SQL2008inHyperV2008.docx