Hi there,
Ballooning is where the host reclaims memory from a Guest VM when it is under memory pressure, usually when it doesn't have enough memory resources to satisfy the demand from it's running VMs, and it does this by 'inflating' the vmmemctl driver in the guest to steal memory back for your host.
In your case this is why it's causing you performance issues as SQL is fighting for allocated memory in your Guest OS with vmmemctl, which is trying to reclaim memory to help provide enough memory to run your VM, in which SQL is doing what SQL does and grabbing all the available memory allocated to it regardless of requirement, so at the moment it's counter-productive.
In your case because you've allocated all your host's RAM to your VM there is nothing left available for the hypervisor or the overhead of running your VM- assuming a minimum of 2 vCPUs in your VM, given the amount of RAM allocated and the fact you're on 4.1 your VM will require nearly 1Gb of RAM overhead to run, which I suspect is largely why the host is fighting to reclaim memory. Factor in the memory requirements of the hypervisor (usually around ~300Mb-ish) and the issue is clear.
To resolve I'd drop the RAM allocated to your VM to 30Gb at the absolute most, you should see the ballooning stop and you should also see improvement in the performance of your VM. Personally I'd drop the vRAM to 24Gb or less and see how the performance is, then add a bit more if deemed necessary, remembering SQL will take all the memory it can get regardless of whether it actually needs it.
Hope that helps
vM
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