Parallax is a distributed storage system that uses virtualization to provide storage facilities specifically for virtual environments. The system employs a novel architecture in which storage features that have traditionally been implemented directly on high-end storage arrays and switches are relocated into a federation of storage VMs, sharing the same physical hosts as the VMs that they serve. This architecture retains the single administrative domain and OS agnosticism achieved by array- and switch-based approaches, while lowering the bar on hardware requirements and facilitating the development of new features. Parallax offers a comprehensive set of storage features including frequent, low-overhead snapshot of virtual disks, the 'gold-mastering' of template images, and the ability to use local disks as a persistent cache to dampen burst demand on networked storage.