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Nested virtualization is the act of running a hypervisor inside a virtual machine – effectively nesting a hypervisor within a hypervisor.
Nested virtualization can be useful for running multiple hypervisors on the same host server. It is also an approach to learning about software products, experimenting with server setups or testing configurations. However, some hypervisor vendors do not support nested virtual machines in a production environment. And, not all hypervisors and operating system versions can nest successfully within all other hypervisors.
When talking about nested virtualization, the hypervisor running on physical hardware is known as the host hypervisor, while the VM running on that hypervisor is called the outer guest. The hypervisor running within the VM is known as the guest hypervisor, while the inner guest or nested guest is the VM running within the other VM.