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I'm not a fan of cryptic question title's, but then I'm not too sure how to elaborate but here goes:

We were planning on buying new PCs for our developers with 128GB SSD drives (the VM takes around 70GB, so I don't think there's enough room for the Windows 7 on there as well, but if you think otherwise please say so!).

If the OS is still on an old spin drive but the VM (using VMWare) is on an SSD will the developers see the full advantage of the SSDs power?

Just as a clarification
I am aware that it will help the performance to have my VM on an SSD; what I'm most interested in is whether I might lose some of the performance benefits if the OS is still on a old style hard disk.

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Updated my answer after your clarification.. –  Sachin Shekhar Feb 3 '12 at 16:22
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up vote 3 down vote accepted

Yes, it'll improve performance as R/W speed of SSD is much higher. Just make sure to save virtual hard disk file on SSD. And, dedicate a part of SSD for paging file virtual memory, too.
I have tested the speed and do the same whenever I require performance boost for my virtual machines.

Update (After your clarification)
If you keep your OS on old style Hard Disk, you'll lose some performance wherever OS is involved. Virtualization software like VMware needs many OS hooks to do many things like virtual networking etc. But, as such things involve small I/O threads, you'll not feel it. Big I/O operations by OS occur at the time of booting, log on, log off & shut down. So, you'll feel performance degradation very little at the time of VM operations.

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Thanks for the update - that makes a lot of sense! –  Josh Comley Feb 3 '12 at 16:47
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Depends on other factors such as processor and RAM but use of the SSD for teh VM should help the VM performance. If you ahve a current multi-core processor and sufficient RAM, this should work well. Running the OS and the VM on the same drive will have a negative impact. Keep the OS and VM ob separate drives and I/O

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Performance will be good -- if the developers are primarily running in the VM, Win7 won't need to do much disk I/O so it won't make much difference whether it's on an SSD or a spinning drive. The biggest thing they'll notice is that Win7 will take longer to boot up on the spinning drive than it would on an SSD, but that's probably a minor consideration.

If you're only using Win7 as the host for the VM and aren't installing many large native applications, you could get away with running both Win7 and the 70GB VM image on the same 128GB SSD drive. I have a 20GB virtual drive that's running Win7 with MS Office Pro 2007 and it fits (without much room to spare).

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