Now that we've covered the host storage, it is time to take a look at how to implement the VM storage. It may look simpler than the host storage, but there are, in fact, multiple choices and possibilities for different environments.
The VM storage can be placed on, basically, two options. A physical disk, also known as a pass-through disk, and a virtual disk. Until Hyper-V on Windows Server 2008 and 2008 R2, using a physical disk had some advantages over the virtual disk. First, the performance on the physical disk was better than using virtual disks. Plus, a virtual disk was able to grow up to 2 TB. If you needed more than 2 TB, it was mandatory to use a physical disk.
Nowadays, a virtual disk can achieve the same performance of a physical disk and can grow up to 64 TB per disk, so using a physical disk brings more drawbacks than benefits. The problem of using a physical disk today is that you don't have all the flexibility of using a virtual one.