Product : Red Hat, RHV/4.0, RHV
Feature : Max Disk Size, Storage, Network and Storage
Content Owner:  Roman Macek
Summary
Yes
Details
During the virtual disk creation, either a preallocated format (RAW) or a thinly provisioned Qcow2 (sparse) format can be specified.

A preallocated virtual disk has reserved storage of the same size as the virtual disk itself. The backing storage device (file/block device) is presented as is to the virtual machine with no additional layering in between. This results in better performance because no storage allocation is required during runtime. On SAN (iSCSI, FCP) this is achieved by creating a block device with the same size as the virtual disk. On NFS this is achieved by filling the backing hard disk image file with zeros. Pre-allocating storage on an NFS storage domain presumes that the backing storage is not Qcow2 formatted and zeroes will not be deduplicated in the hard disk image file. (If these assumptions are incorrect, do not select Preallocated for NFS virtual disks).

For sparse virtual disks backing storage is not reserved and is allocated as needed during runtime. This allows for storage over commitment under the assumption that most disks are not fully utilized and storage capacity can be utilized better. This requires the backing storage to monitor write requests and can cause some performance issues. On NFS backing storage is achieved simply by using files. On SAN this is achieved by creating a block device smaller than the virtual disks defined size and communicating with the hypervisor to monitor necessary allocations. This does not require support from the underlying storage devices.