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1.) All VMs should have a ballon driver installed in them. The hypervisor communicates with the ballon driver to free up and make the memory available to a guest. So in case of
* XenSever.
The ballon driver can be found as a part of xen pv or PVHVM drivers. The xen pvhvm drivers are included in upstream linux kernels 2.6.36+.
*VMware.
In case of VMware the ballon deiver can be found as a part of the vmware tools. All the guests that are deployed in a overcommit cluster should have the vmware tools installed.
*KVM
All the guest are required to support the virtio drivers. All the linux kernels>= 2.6.25 have them installed. Admin needs to activate it. It can be done by setting CONFIG_VIRTIO_BALLOON=y in the virtio configuration.

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*VMware & KVM.
The memory ballooning is supported by default.

h.1 As of now cloudstack dose not check for any perquisites. It is the admin's responsibility to provision accordingly.