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I would like to install parallels and then install ESxi on top of it to get the distributed storage, Is this possible??. Is there any free tools available in VMWare o do the same?. I'm a newbie, need some guidance.

I would like to create a private cloud with multiple VM's in it, exploring all the options available.

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Since you need to get virtualization for free, VMware vSphere Hypervisor is not an option. That being said, VMware vSphere Free edition would not provide any beneficial features like erasure coding, clustering, HA and FT, DFS or VSAN due to license restrictions.

I would suggest you look at Windows Server Hyper-V Free 2016. It does not have GUI, however, provides you fully functional hypervisor for free with built-in features such as ReFS and nested virtualization.

As a shared storage provider either HPE VSA (free) or StarWind Virtual SAN can be used providing to Hyper-V Cluster highly available and fault tolerant storage presenting local disks as iSCSI ones. Personally, I would prefer StarWind so far it's native for Windows and provides significant storage performance due to the usage of built-in RAM and SSD cache features.

Mr. Raspberry
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    But don't forget in order to manage Microsoft Core version you would need to have some additional experience:) – Stuka Dec 09 '16 at 16:30
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To run a hypervisor on a hypervisor, the base hypervisor software must support "nested hypervisors" or "nested virtualization", as x86 hardware can't currently do that in hardware from what I currently understand.

It appears according to this that Parallels does in fact support that. So give it a shot. Some other searching via Google seems to suggest others have tried this but ran into problems. If ESXi doesn't work try VMWare or VirtualBox.

LawrenceC
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    Not Virtualbox, at least from everything I've read/seen. – rnxrx Dec 09 '16 at 04:27
  • X86 can do that - but it requires hypervisors coded for that. Example: Server 2016 Hyper-V can do that (https://msdn.microsoft.com/en-us/virtualization/hyperv_on_windows/user_guide/nesting). – TomTom Dec 09 '16 at 12:39
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My question would be: Why?

If you want distributed storage, consider using a storage cluster or VSAN