As trotsky mentions, we at Joyent are fervent believers in OS-based virtualization -- to the point that in SmartOS, we run hardware virtualization within an OS container. There are many reasons to favor OS-based virtualization over hardware-based virtualization, but first among these (in my opinion) is DRAM utilization: with OS-based virtualization, all unused DRAM is available to the system at large, and in the SmartOS case is used as adaptive replacement cache (ARC) that benefits all tenants. Given that few tenants consume every byte of their allocated DRAM, this alone leads to huge efficiencies from both the perspective of the cloud operator and the cloud user -- a higher-performing, higher-margin service. By contrast, for hardware-based virtualization, unused DRAM remains with the guest and is simply wasted (kludges like kernel samepage mapping and memory ballooning notwithstanding).

DRAM isn't the only win, of course: for every other resource in the system (CPU, network, disk), OS-based virtualization offers tremendous (and insurmountable) efficiency advantages over hardware-based virtualization -- and it's great to see others make the same realization!

For more details on the relative performance of OS-based virtualization, hardware-based virtualization and para-virtualization, see my colleague Brendan Gregg's excellent blog post on the subject[1].

[1] http://dtrace.org/blogs/brendan/2013/01/11/virtualization-pe...