Is there a way to make copies of virtual server backups that are suitable for long-term retention? Or is this best handled using a separate archiving product?
The answer to this question really depends on the overall goals and on the nature of the backup. To put it simply, yes, there are options for backing up virtual servers for long-term retention. However, there are certain challenges that must be considered.
First, assuming that you want to retain a full copy of a virtual server, then you must consider whether it is better to make a full server backup (using your backup software) or to simply make a copy of the virtual hard disk files. Generally it will be better to make a backup than to copy the virtual hard disk files because a backup will contain virtual machine settings (such as hardware allocations and snapshots). Those elements are not included in a copy of a virtual hard disk file.
Another consideration is to keep the backup safe over the retention period. Writing a backup of a virtual server to a tape or to a Blu Ray disk is convenient, but you run the risk of the backup becoming damaged or misplaced (especially if the backup needs to be retained for many years). Imagine, for instance, that 10 years from now someone needs to restore the backup. The same people might not even be working for the company in 10 years. What are the odds that the person tasked with the restoration will be able to find the correct tape?
For virtual machine copies that require an extremely long retention period, you might be better off making a copy of the virtual hard disk files and adding the copy to your archive system.
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