System Center 2016 Virtual Machine Manager Cookbook(Third Edition)
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Lab environments

I would recommend up to 50 hosts in a lab environment with SQL Server and all VMM components installed on a single VM. It will work well, but I would not recommend this installation in a production environment.

Alternatively, you can leverage a nested virtualization feature in Windows Server 2016. In other words, with nested virtualization, a Hyper-V host itself can be virtualized, so you can make your lab on a single host. Using VMM 2016, you can add a vritualized Hyper-V host to the fabric and manage VMs running on the host. However, a true support of nested virtualization is available only in VMM 1801 semi-annual channel release (for example, enabling and disabling nested virtualization on the VM through VMM console)