Embodiments relate to off-loading aspects of storage virtualization to storage hardware and modifying software to take advantage of hardware virtualization features. A co-design of hardware and software allows a filesystem to provide files such that indirection overhead normally needed to access the content of files can be bypassed while still managing the files as filesystem objects. A storage device manages and exposes a virtual volume which is used to store the content of a file. Virtual volumes can be initialized or populated so that virtual blocks therein align with device storage blocks. A virtual volume can be initialized and populated by parsing a virtual disk file to access virtual disk metadata, which is then used to determine and set features of the virtual volume.