Type 2 hypervisor (hosted hypervisor)
A Type 2 hypervisor, also called a hosted hypervisor, is a virtual machine (VM) manager that is installed as a software application on an existing operating system (OS).
There are two types of hypervisors: Type 1 and Type 2. Type 2 hypervisors support guest virtual machines by coordinating calls for central processing unit (CPU), memory, disk, network and other resources through the physical host's OS. This makes it easy for an end user to run a VM on a personal computing (PC) device. Type 2 hypervisor vendors and products include VMware Fusion, Oracle Virtual Box, Oracle VM for x86, Solaris Zones, Parallels Desktop and VMware Workstation Pro.
In contrast, a Type 1 hypervisor -- also called a bare-metal hypervisor -- is installed directly on physical host server hardware just like an OS. Type 1 hypervisors run on dedicated hardware. They require a management console and are used in data centers. Type 1 hypervisor vendors and products include Oracle VM Server for Sparc, ESXi, Hyper-V and Kernel-based VM (KVM).
Regardless of the implementation, VMs and their guest OSes are typically unaware of which type of hypervisor is implemented, as they interact only with the hypervisor itself.
Type 2 performance and management
Type 2 hypervisors don't typically perform as well as Type 1 hypervisors. A Type 1 hypervisor runs directly on a physical host machine, whereas a Type 2 hypervisor runs on top of the host's OS. This means that unlike with Type 1 hypervisors, VMs don't have direct access to the underlying hardware. As such, VMs must pass requests for hardware resources to the host OS, which then accesses the physical hardware on the VM's behalf. In contrast, VMs running on Type 1 hypervisors have direct hardware access, enabling better performance.
The VMs running on a Type 2 hypervisor are managed using a virtual machine monitor (VMM) -- not to be confused with Microsoft's Virtual Machine Manager. A VMM is an application that runs on top of the parent OS and acts as an interface to the virtual environment. VMM is a generic term for a virtualization management tool, and virtualization vendors typically give their management tools names. For example, Oracle calls its VMM VirtualBox Manager.
A VMM allows the user to create and delete VMs. It also provides the tools necessary for allocating resources to VMs. For example, an administrator who needs to add extra memory to a VM would do so through a VMM.
A VMM often allows the user to configure the hypervisor as well. For instance, an admin might use a VMM to specify the folder where VM files are to be stored or to set a limit on the total amount of memory VMs running on the host can collectively consume.
Type 2 costs
Organizations that want to make use of a Type 2 hypervisor must consider the hypervisor's total cost of ownership (TCO). One of the first costs that must be considered is licensing costs. Although some Type 2 hypervisors are free, there are vendors that distinguish between individuals and corporations regarding licensing. Depending on the vendor, this could mean a business must pay to license the hypervisor or to use certain features. For example, Oracle VirtualBox is available for free, but businesses must pay to use Extension Pack features such as USB 3.0 (Universal Serial Bus 3.0) pass through and Preboot Execution Environment (PXE) boot.
In addition to hypervisor-specific licensing costs, organizations must also ensure their guest VMs are properly licensed. The need for an OS license doesn't go away just because the OS is running in a VM.