Storage Spaces Direct (S2D) is embedded into the Windows 2019 Server operating system. This means it does not require any Controller VMs to be deployed on top of the hypervisor platform.
To be more precise, S2D is a feature that is fully integrated into Windows Failover Clustering. When you create a Windows cluster, the S2D feature is disabled by default so you will have to enable it.
Microsoft has also developed the Software Storage Bus so each direct attached disk in each server node can be accessed by others server nodes.
Both Kernel Integrated and Virtual Controller are distributed architectures, having one active component per virtualization host that work together as a group. Both architectures are capable of delivering a complete set of storage services and good performance. Kernel Integrated solutions reside within the protected lower layer and Virtual Controller solutions reside in the upper user layer. This makes Virtual Controller solutions somewhat more prone to external actions (eg. most VSCs do not like snapshots). On the other hand Kernel Integrated solutions are less flexible because a new version requires the upgrade of the entire hypervisor platform.
Microsoft, S2D [SDS]/2019, Datacenter
Hypervisor Deployment, Virtualization, Workload Support