By default, XenServer create LVM-type local storage repository (SR). The LVM-type local SR does not support VHD-formatted virtual hard disks, and hence may not be an ideal option when you are using XenServer along with OpenStack which has features that require access to individual VHD files, for VM snapshot and migration. On the other hand, with EXT-type local SR, you can get direct access to VHD files.
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