Type 1 Hypervisor
This is what is called a bare metal hypervisor provides a minimal operating system that provides just what's needed to run virtual machines. Because a Type 1 hypervisor runs directly on the hardware it is said to support hardware virtualisation.
Examples are Citrix's open-source XenServer powers Amazon Web Services (AWS). Oracle VM for SPARC and x86 are both based on Xen. There's VMware's ESX and ESXi, Microsoft Hyper-V, and HP's Integrity VM. Instances of the operating system are installed directly on the hyper-visor itself.
A type 1 hyper-visor is very basic and all you get when you boot is basic hardware information and an IP address which allows you to connect to it from the management console running on a separate machine. The management console can be used to do things like moving instances of the operating systems between server hardware. You can also manage and allocate resources to a schedule or automatically in response to changes in resource need. This can also help with power consumption, with servers switched on and off as necessary. You can configure to make the instances fault tolerant so that failures are sensed with resources switched in order to maintain services. Most hyper-visors are free and most are based on Xen which is open source. The management console is chargeable for and gives you extended functionality which most enterprises require.
Over allocation – over allocation relies on sharing of memory, you can allocate more RAM in total than is available in the knowledge that not all servers will require all the RAM all of the time. The hyper-visor will allocate RAM according to need and then switch this to other instances as required, this is called dynamic allocation. Some older servers cannot do this and this is called static allocation.
Type 2 Hyper-visor
Type 2 hyper-visors are also called a hosted hyper-visor. It is a virtual machine manager that is installed as a software application on an existing operating system and this is referred to as software virtualisation. It does not need a separate management console as the hyper-visor opens on a familiar operating system and making it very easy to work with. Bear in mind that memory allocation is generally fixed, you cannot over-allocate as in Type 1.
Install through Roles and Features in Windows Server Manager. Management of the Hyper-V Hyper-visor is via Tools, Hyper-V Manager. From within Hyper V you can then install instances of operating systems, these can be different systems (e.g. Windows, Ubuntu, Unix) or operating systems versions. To access the server you simply double click on the listed instance, which makes it really easy to manage. Before creating server instances you create a virtual switch which allows you to connect to the network.