- KVM is full virtualization, OpenVZ is container based. This means any operating system (Windows, Linux, *BSD) can be installed on a KVM VPS from the ISO image. OpenVZ VPS are Linux container based, and only support most common Linux operating systems via a pre-made template.
- Since KVM is full virtualization, this means you have full control over the VPS kernel, and can do things such as encrypting your OS partitions.
- OpenVZ VPS are container based and use the host kernel, therefore it's more faster for things like booting/reinstalling, and offers slighlty more features to control it in the control panel. This might be better for someone like a web developer who needs something they can modify or reinstall quickly.
- With KVM you can use SELinux on operating systems that support it, on OpenVZ there is no option to use or modify SELinux.
- OpenVZ may not work well for GRE tunneling, if you are looking to host a GRE tunnel, a KVM VPS would be much better since your server would be running it's own network interface. Both OpenVZ and KVM support other methods such as PPTP and OpenVPN.
- Since OpenVZ shared the host kernel and doesn't use full virtualization, you may experience better disk/CPU performance.
- OpenVZ can be easily upgraded or downgraded without downtime, while a KVM VPS will require a reboot for memory changes and disk size changes need to be done manually by modifying the partition with something like GParted.
- KVM has swap space while OpenVZ uses a 'vSwap', essentially burstable memory allocations.
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