Dynamic Memory is Coming to Hyper-V R2

As reported by the Microsoft Virtualization Team, dynamic memory will be coming to Hyper-V in Windows Server 2008 R2 in Service Pack 1.

Dynamic memory allows greater density on Hyper-V host servers by specifying a lower and upper limit to RAM allocated to the VM.  Hyper-V will automatically hot-add or remove RAM as the workload changes and it can do this with minimal performance impact.  This is not the same as VMware's memory overcommitment, which allows you to over-subscribe RAM to your VMs (giving more RAM to your VMs than actually exists in the host server).

When using dynamic memory you need to be mindful of your applications. Exchange and SQL will use as much RAM as is available to the system, so these systems may always run closer to the maximum RAM setting you define.  This can be specified in Hyper-V or sometimes inside the virtualized application itself.

Newer servers are available with MUCH larger memory configurations (48GB, 64GB, 128GB or more).  One of the limiting factors affecting VM density has been the memory configuration of those guests.  Dynamic memory allows you to utilize all the assets of the host server while providing a consistent level of performance.

Speaking of performance, you really should read the Windows Server 2008 / Windows Server 2008 R2 / Windows 7 Virtual Hard Disk Performance whitepaper.  This paper gives some great performance data for Hyper-V with different application workloads, like Exchange, SQL and web servers.