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[Alex Ng <alexng@xxxxxxxxxxxxx>]

One other caveat I should mention:

Even if the VM has reduced its memory consumption, Hyper-V does not
necessarily reclaim the unused memory from that VM.

Generally, Hyper-V reclaims unused memory from a VM if it's seeing
memory pressure from other VMs or if the Hyper-V host itself is seeing
memory pressure.

The behavior you are seeing might be expected. Indeed, if your physical
host has a lot of physical memory, Hyper-V may decide that enough memory
is available to satisfy all VMs and it doesn't need to reclaim.

If say a bunch of other VMs come online that also need a lot of memory,
perhaps we would see Hyper-V start to reclaim the unused memory from the
existing VMs.

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https://bugs.launchpad.net/bugs/1584597

Title:
  Hyper-V Memory Ballooning re-broken in 16.04

Status in linux package in Ubuntu:
  Triaged
Status in linux source package in Xenial:
  Triaged

Bug description:
  Regression: #1294283 fixed memory ballooning in Hyper-V in 14.04, but
  the bug has returned in 16.04.

  
  Steps to reproduce:

  1. Create Gen2 Hyper-V VM
  2. Install Ubuntu 16.04
  3. modprobe hv_balloon
  Memory usage according to Hyper-V Manager will not change

  
  This has been reproduced on 2 fresh Ubuntu Server 16.04 instances.

  I installed linux-generic-xenial on a 14.04 instance, rebooted,
  modprobe'd hv_balloon and memory usage in Hyper-V Manager reduced to
  the correct level.

  Environment:
  Host: Windows NanoServer 2016

  Ubuntu Server 16.04 version_signature: `Ubuntu 4.4.0-21.37-generic 4.4.6`
  Ubuntu Server 14.04 version_signature: `Ubuntu 4.4.0-22.40~14.04.1-generic 4.4.8`

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