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I have a 2.4Ghz Core 2 Duo MacBook Pro with 4GB memory. I have a 120GB SSD but it only has about 25GB of free space.

My Windows XP Virtual Machine currently uses just over 20GB of disk space. I would like to run a Windows 7 VM & Visual Studio 2010 on my SSD but retain the existing Windows XP VM and run it from an external drive via Firewire 800 due to the need to support legacy applications.

Is this possible and would Windows XP perform well enough?

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Yes, it would be possible (just move the VM to the FW hard disk and point the VM app accordingly), and Win XP would perform well enough.

Firewire 800 measured throughput is about 60~70 megabytes per sec. that should be plenty fast bandwidth even for moderate IO intensive tasks on your XP VM.

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+1 Firewire works well. eSATA would be slightly better but not an option here. Definitely better than USB 2.0. Faster drives may help as well. In test we did, the 7200 RPM drive was faster. SSD was fastest naturally. –  Dave M Feb 16 '11 at 21:29
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It is certainly possible. Exactly how depends on the virtualisaion solution you run (I've not used Fusion), but essentially you should just be able to copy the files representing the VM over to the external drive and point VMWare towards them.

Performance wise you should be fine on firewire 800. I run a small XP VM of a USB connected external drive (maximum data rate somewhere a little over 20Mbyte/sec) on my netbook and while I'd not use it for Visual Studio 2010 it works pretty well for the basics (IE for testing web compatibility, Office 2003 for similar reasons). A good drive with a good firewire controller may well be as fast as the drives that were common at the time of XP's release. I've not used a Firewire 800 connected drive personally, but if I remember rightly the real-world speed of the interface is usually rated at three or more times that of good USB interfaces so as I find USB "good enough" firewire defitely will be unless you have a very IO intensive task to throw at it or are difficult to please!

It won't be as fast as when running off your internal SSD of course. If you do notice a speed difference large enough to bother you, make sure you've given the VM enough RAM so that the guest OS isn't needing to use the page file much, if at all.

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