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The Two Big I/O Taxes in Virtualized Environments

Brian Morin

When organizations virtualize, they typically overrun the I/O capabilities of the underlying storage infrastructure and aren't able to scale the virtual infrastructure as far as they would like. Instead of asking "why" and getting to the root of the problem of performance bottlenecks, they typically run blindly into an expensive rip-and-replace of the SAN architecture to create more I/O overhead and try to "flash" their way out of performance issues. More recently, administrators have begun to discover you can't "flash" your way out of virtual machine (VM) performance issues without overspending on hardware if you ignore the two big I/O taxes in a virtual environment that inflates IOPS (Input/Output Operations per Second) requirements and steals bandwidth from server to storage.

The two big performance penalties in virtualized environments to be aware of are the "Windows I/O tax" and the "I/O blender" tax. No matter how many spindles or how much flash is added to the infrastructure, much of that performance is ultimately robbed due to I/O characteristics that are much smaller, more fractured, and more random than it needs to be and that steals up to 50% available throughput from server to storage.

Small, Fractured I/O Tax

As the most virtualized operating system, Windows suffers from free space allocation inefficiencies at the logical disk layer that inflates the IOPS requirements for any given workload as the relationship between I/O and data begins to break down over time. This occurs because when Windows NTFS writes data in a SAN storage environment, file allocations become unnecessarily fractured across different addresses at the logical disk layer, resulting in every piece of the file requiring its own I/O operation to process. Instead of carrying an optimal amount of data with every I/O request, a single file may take multiple I/O to process instead of single I/O had Windows first employed intelligence about choosing the best allocation instead of the next available allocation. Consequently, this results in the first I/O tax: I/O that is smaller and more fractured than necessary.

It's not just every write that is subsequently penalized, but every subsequent read as well. It is common for a 32K file to be efficiently processed with a single I/O on day one when a file system is fresh and new, but as time goes on as files are re-written, erased and extended, I/O density suffers and ultimately systems require four 8K I/O operations or eight 4K I/O operations to process the whole 32K file. More fractured environments will experience hundreds of I/O operations to process a single file which is akin to pouring molasses on systems.

"I/O Blender" Tax

The second tax is that of the "I/O blender." This tax occurs when mixing multiple VMs on one server, and then connecting those various servers to shared storage. The result is a highly random I/O stream that diminishes the entire virtualized environment.

To understand this, think about the consequence of disparate VMs sharing a single host, routing otherwise sequential I/O traffic to the hypervisor where those I/O streams become "blended." The resulting random I/O pattern then gets sent to storage, which further dampens storage performance.

Clearly, while it hurts systems to be taxed with small, fractured I/O from Windows due to free space allocation inefficiences, it's even more damaging to take all that small, fractured I/O and randomize those I/O streams when they become mixed at the hypervisor. When virtualized organizations hit an I/O ceiling that requires higher performance than the company's storage infrastructure can deliver, administrators commonly think they need to buy more IOPS, when in fact the Windows I/O tax and the "I/O blender" effect has robbed throughput, making systems more IOPS intensive than they need to be. By focusing on trying to solve the root of I/O inefficiencies first, organizations can get to the bottom of the real issue that's wasting their current and future hardware resources.

A Better Solution

As an alternative solution, these I/O inefficiencies can be easily remedied by using I/O reduction software that targets the root cause problem so administrators get the most performance possible from their hardware infrastructure after virtualizing. Today's software has been shown to result in up to 300 percent faster application performance on existing systems. By optimizing the I/O profile, software intelligence can increase I/O density and sequential writes and subsequent reads while also leveraging available DRAM to target the I/O the steals the most bandwidth from VM to storage – small, random I/O. This reduces latency and frees the infrastructure from performance-diminishing I/O.

This approach not only protects a company's investment in its existing hardware infrastructure, but it also solves performance bottlenecks without disruption and ensures organizations can maximize future storage system investment. In short, I/O optimization software can more effectively solve the application performance issues for virtualized environments — without requiring any new hardware.

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The Two Big I/O Taxes in Virtualized Environments

Brian Morin

When organizations virtualize, they typically overrun the I/O capabilities of the underlying storage infrastructure and aren't able to scale the virtual infrastructure as far as they would like. Instead of asking "why" and getting to the root of the problem of performance bottlenecks, they typically run blindly into an expensive rip-and-replace of the SAN architecture to create more I/O overhead and try to "flash" their way out of performance issues. More recently, administrators have begun to discover you can't "flash" your way out of virtual machine (VM) performance issues without overspending on hardware if you ignore the two big I/O taxes in a virtual environment that inflates IOPS (Input/Output Operations per Second) requirements and steals bandwidth from server to storage.

The two big performance penalties in virtualized environments to be aware of are the "Windows I/O tax" and the "I/O blender" tax. No matter how many spindles or how much flash is added to the infrastructure, much of that performance is ultimately robbed due to I/O characteristics that are much smaller, more fractured, and more random than it needs to be and that steals up to 50% available throughput from server to storage.

Small, Fractured I/O Tax

As the most virtualized operating system, Windows suffers from free space allocation inefficiencies at the logical disk layer that inflates the IOPS requirements for any given workload as the relationship between I/O and data begins to break down over time. This occurs because when Windows NTFS writes data in a SAN storage environment, file allocations become unnecessarily fractured across different addresses at the logical disk layer, resulting in every piece of the file requiring its own I/O operation to process. Instead of carrying an optimal amount of data with every I/O request, a single file may take multiple I/O to process instead of single I/O had Windows first employed intelligence about choosing the best allocation instead of the next available allocation. Consequently, this results in the first I/O tax: I/O that is smaller and more fractured than necessary.

It's not just every write that is subsequently penalized, but every subsequent read as well. It is common for a 32K file to be efficiently processed with a single I/O on day one when a file system is fresh and new, but as time goes on as files are re-written, erased and extended, I/O density suffers and ultimately systems require four 8K I/O operations or eight 4K I/O operations to process the whole 32K file. More fractured environments will experience hundreds of I/O operations to process a single file which is akin to pouring molasses on systems.

"I/O Blender" Tax

The second tax is that of the "I/O blender." This tax occurs when mixing multiple VMs on one server, and then connecting those various servers to shared storage. The result is a highly random I/O stream that diminishes the entire virtualized environment.

To understand this, think about the consequence of disparate VMs sharing a single host, routing otherwise sequential I/O traffic to the hypervisor where those I/O streams become "blended." The resulting random I/O pattern then gets sent to storage, which further dampens storage performance.

Clearly, while it hurts systems to be taxed with small, fractured I/O from Windows due to free space allocation inefficiences, it's even more damaging to take all that small, fractured I/O and randomize those I/O streams when they become mixed at the hypervisor. When virtualized organizations hit an I/O ceiling that requires higher performance than the company's storage infrastructure can deliver, administrators commonly think they need to buy more IOPS, when in fact the Windows I/O tax and the "I/O blender" effect has robbed throughput, making systems more IOPS intensive than they need to be. By focusing on trying to solve the root of I/O inefficiencies first, organizations can get to the bottom of the real issue that's wasting their current and future hardware resources.

A Better Solution

As an alternative solution, these I/O inefficiencies can be easily remedied by using I/O reduction software that targets the root cause problem so administrators get the most performance possible from their hardware infrastructure after virtualizing. Today's software has been shown to result in up to 300 percent faster application performance on existing systems. By optimizing the I/O profile, software intelligence can increase I/O density and sequential writes and subsequent reads while also leveraging available DRAM to target the I/O the steals the most bandwidth from VM to storage – small, random I/O. This reduces latency and frees the infrastructure from performance-diminishing I/O.

This approach not only protects a company's investment in its existing hardware infrastructure, but it also solves performance bottlenecks without disruption and ensures organizations can maximize future storage system investment. In short, I/O optimization software can more effectively solve the application performance issues for virtualized environments — without requiring any new hardware.

Hot Topics

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Like most digital transformation shifts, organizations often prioritize productivity and leave security and observability to keep pace. This usually translates to both the mass implementation of new technology and fragmented monitoring and observability (M&O) tooling. In the era of AI and varied cloud architecture, a disparate observability function can be dangerous. IT teams will lack a complete picture of their IT environment, making it harder to diagnose issues while slowing down mean time to resolve (MTTR). In fact, according to recent data from the SolarWinds State of Monitoring & Observability Report, 77% of IT personnel said the lack of visibility across their on-prem and cloud architecture was an issue ...

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Technology management is evolving, and in turn, so is the scope of FinOps. The FinOps Foundation recently updated their mission statement from "advancing the people who manage the value of cloud" to "advancing the people who manage the value of technology." This seemingly small change solidifies a larger evolution: FinOps practitioners have organically expanded to be focused on more than just cloud cost optimization. Today, FinOps teams are largely — and quickly — expanding their job descriptions, evolving into a critical function for managing the full value of technology ...

Enterprises are under pressure to scale AI quickly. Yet despite considerable investment, adoption continues to stall. One of the most overlooked reasons is vendor sprawl ... In reality, no organization deliberately sets out to create sprawling vendor ecosystems. More often, complexity accumulates over time through well-intentioned initiatives, such as enterprise-wide digital transformation efforts, point solutions, or decentralized sourcing strategies ...

Nearly every conversation about AI eventually circles back to compute. GPUs dominate the headlines while cloud platforms compete for workloads and model benchmarks drive investment decisions. But underneath that noise, a quieter infrastructure challenge is taking shape. The real bottleneck in enterprise AI is not processing power, it is the ability to store, manage and retrieve the relentless volumes of data that AI systems generate, consume and multiply ...

The 2026 Observability Survey from Grafana Labs paints a vivid picture of an industry maturing fast, where AI is welcomed with careful conditions, SaaS economics are reshaping spending decisions, complexity remains a defining challenge, and open standards continue to underpin it all ...

The observability industry has an evolving relationship with AI. We're not skeptics, but it's clear that trust in AI must be earned ... In Grafana Labs' annual Observability Survey, 92% said they see real value in AI surfacing anomalies before they cause downtime. Another 91% endorsed AI for forecasting and root cause analysis. So while the demand is there, customers need it to be trustworthy, as the survey also found that the practitioners most enthusiastic about AI are also the most insistent on explainability ...

In the modern enterprise, the conversation around AI has moved past skepticism toward a stage of active adoption. According to our 2026 State of IT Trends Report: The Human Side of Autonomous AI, nearly 90% of IT professionals view AI as a net positive, and this optimism is well-founded. We are seeing agentic AI move beyond simple automation to actively streamlining complex data insights and eliminating the manual toil that has long hindered innovation. However, as we integrate these autonomous agents into our ecosystems, the fundamental DNA of the IT role is evolving ...

AI workloads require an enormous amount of computing power ... What's also becoming abundantly clear is just how quickly AI's computing needs are leading to enterprise systems failure. According to Cockroach Labs' State of AI Infrastructure 2026 report, enterprise systems are much closer to failure than their organizations realize. The report ... suggests AI scale could cause widespread failures in as little as one year — making it a clear risk for business performance and reliability.

The quietest week your engineering team has ever had might also be its best. No alarms going off. No escalations. No frantic Teams or Slack threads at 2 a.m. Everything humming along exactly as it should. And somewhere in a leadership meeting, someone looks at the metrics dashboard, sees a flat line of incidents and says: "Seems like things are pretty calm over there. Do we really need all those people?" ... I've spent many years in engineering, and this pattern keeps repeating ...