A Type 2 Hypervisor is a virtualization layer that is installed above a host operating system (OS), such as Windows Server, Linux, or a custom OS installation. The host operating system has direct access to the server's hardware and is responsible for managing basic OS services. The Type 2 Hypervisor creates virtual machine environments and coordinates calls for CPU, memory, disk, network, and other resources through the host OS.
A Type 1 Hypervisor, by contrast, is installed directly on physical host server hardware. It does not require the presence of a full host OS and has direct access to the underlying physical hardware. Regardless of the implementation, virtual machines (VMs) and their guest OS's are typically unaware of which type of Hypervisor is implemented, as they interact only with the hypervisor itself.
From an implementation standpoint, there are potential benefits and drawbacks of both types of Hypervisors. For example, the requirement of a full host OS can be seen as an advantage in some areas (including hardware and driver compatibility, configuration flexibility, and reliance on familiar management tools), or as a potential liability (based on potential security issues exposed by the host OS, possible performance overhead, and management burdens for configuring and maintaining the host OS). It is also important to note that current virtualization platforms can exhibit characteristics of both Type 1 and Type 2 Hypervisors and that vendors have provided features that can mitigate potential issues in both approaches.
See also: client hypervisor