Well, instant recovery certainly can have a performance impact, because you're adding an increased workload to the backup server. There are really three things going on at the same time on the backup server.
First, the backup server is still continuing to process the usual backup workload -- assuming you're using continuous data protection, which most of the in-place products do. Then, the backup server is hosting the backup instance of a virtual machine or even multiple virtual machines, depending on the nature of the failure. And finally, you have the recovery effort going on in the background.
The key to preventing that performance impact with instant recovery is planning. When you're planning the backup infrastructure, you have to assume this sort of thing is going to happen from time to time and build a backup infrastructure that is capable of dealing with it. This can require a significant investment in new backup hardware, depending on what you are currently running.
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