It is possible to implement Hyper-V on the Azure VM using the configuration called “Nested Virtualization”.
Nested virtualization is a feature that lets you run Hyper-V inside a Hyper-V virtual machine (VM) or in an Azure VM.
It is important to note the below factor before we conclude with the Nested Virtualization per Microsoft.
- Nested Virtualization isn’t suitable for Windows Server Failover Clustering, and performance sensitive applications. We recommend you fully evaluate the services and applications.
- Nested Hyper-V VMs are ideal for test labs. They allow easy configuration changes and saved states for quick reversion. Since Production level SLAs are not applicable for test labs.
- Production environments running Hyper-V VMs running on Hyper-V VMs are supported. However, it’s recommended to make sure that your services and applications are also supported.
- Not all Azure VMs are supported for Nested Virtualization.
- Also, Microsoft Azure VM SLA will be applicable to the base VM and may not applicable to Hyper-V VMs.
PFA
What is Nested Virtualization for Hyper-V? | Microsoft Learn
Nested Virtualization in Azure | Microsoft Azure Blog
Regarding VMware, we may not be able to install VMware ESXi in an Azure VM. Since VMware ESXi host can be installed using tools like Intel-VT for this we would need to have access to the underlying CPU hardware.
As we do not have control over the hardware in an Azure environment, we will not be able to install a VMware ESXi host in an Azure VM.
Alternatively, we can leverage the Azure VMware solution. Azure VMware Solution provides private clouds that contain VMware built from dedicated bare-metal Azure infrastructure typically as a private cloud. Please click on the below link for more information.
Azure VMware Solution | Microsoft Azure
To conclude, we can utilize the “Nested Virtualization” technology for UAT and Lab environments as per Microsoft and we can use the VMware solution for Production instances subject to budget constraints as the cost may be comparatively higher than the Azure VMs.