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Hello wdc,

OpenStack is not to be considered as high availbility on the virtual machines it deploys, it's not the same as for example VMware clusters that is a pure enterprise solution for high availbility. OpenStack is built as a cloud solution where you deploy virtual machines which is not high available but instead you can deploy several and in for example different availability zones or regions to make up the high availability, this is basicly what cloud computing is for.

Back to your question, yes you can run a whole OpenStack cloud virtualized but it's not recommended, atleast not for compute and block storage nodes because you can lose cpu/disk performance which is very noticeable to the end user, you should also ask yourself on how reliant your current virtualization environment is to run such critical services.

We are running a lot of our OpenStack services on VMware clusters but we still have dedicated hardware for compute and network nodes, we are using a third party storage solution so we are running cinder on VMware aswell because it's simply an API talking to our third party storage.

Best regards