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As of now, has started providing VPS with KVM virtualization which thereby means the you can have access to the kernel of the specific VPS on which the KVM is provided.
So recently I came up on posts where you can virtualize another OS on your current OS if you have kernel access(KVM).
So let's leave the performance issues apart and focus on a single topic.
Is it possible that I acquire a VPS with KVM virtualization, install Fedora on it and then virtually run Windows Server or some other form of Windows OS on it and then connect to it using RDP?
What specific problems could it face?
What could be another way to get a form of GUI on top of the normal console that we're all used to in Linux VPS servers?
KVM virtualization is a lot more than just having the ability to fully use and customize your own kernel! It is full hardware virtualization. Hence why it is as close as possible to real hardware. That means you can run Windows directly on it or as you'd maybe do with Linux on your PC for testing use software like VMWare or Virtualbox to create a VM. You could even use KVM inside KVM (also known as nested KVM).

To answer your question: Yes, it is possible to run Windows inside a VM inside the KVM container you have. Just use a virtualization software such as Virtualbox or VMWare on the OS that you've running inside your KVM. However before doing that make sure your KVM version supports virtualization CPU extension passthrough to the KVM containers. This can be easily checked by doing "cat /proc/cpuinfo" and look for all possible existing virtualization related extensions such as VT-d and so on.

If that is not available you will have some really heavy performance issues because lack of these extensions inside the KVM means that you'd basically try to use hardware virtualization on a machine where the CPU is not able to provide hardware virtualization. That leads to forced software virtualization which might work for Linux with bad performance but might totally fail for Windows or your performance might be even more worse.

Now to your question regarding possible issues:
1) You are running nested virtualization which means you have double overhead and that costs quite some performance and resources. You will feel it when using the VM and Windows inside the VM.
2) As mentioned when you lack the virtualization CPU extensions the performance of the VM might be absolutely horrible to the extend that the host node (your KVM VPS) will be totally overloaded by itself. You could possibly get suspended for CPU and resources abuse because of that.
3) Again due to lack of the extensions it can possibly be that you cannot virtualize Windows. Depends on which Windows you are trying to virtualize though. I think some older versions might work. But we're just talking about stuff like Server <2008. Newer ones will certainly have issues as they usually do have VM detection code and etc.
4) Your provider might not like nested virtualization due to above mentioned reasons and you might get kicked out as simple as that. Also you obviously need a valid Windows server license.

You'd rather install Windows directly if Windows ISOs are available inside the control panel.

Alternatively keep using Linux with a GUI and VNC. Gnome, LXDE, XFCE and many more. A lot to choose from.
I'm running windows with vga passthru on QEMU/KVM at home, you should have no problems creating a windows KVM container in your container. (inception, how deep will you go?)
(03-07-2017, 12:40 PM)coreyman Wrote: [ -> ]I'm running windows with vga passthru on QEMU/KVM at home, you should have no problems creating a windows KVM container in your container. (inception, how deep will you go?)

But would it lag or be just as smooth?
I expect some overhead from virtualization. It will be slower than running on real hardware. Add the fact that you're running it inside a virtualized container as well.