The setup and use of Fedora Server Edition as a virtual machine within a Fedora Server installation needs to be simplified and facilitated. As far as possible, the virtual machine should have the same features and capabilities for users and system administrators as a bare-metal installation, i.e. as similar a 'user experience' as possible. Above all, the same procedures for installation and configuration should be available, e.g. Ansible playbooks.
Cloud Base Image as VM in Fedora Server Edition
The idea was raised by Matthew Miller in the December 2020 "Reboot" meeting  and found its way into the first draft of a revised Fedora Server Edition Product Requirement Document (Server PRD). In March 2021 pboy published an article in Fedora Magazine exploring the use of Cloud Images as VM in Fedora Server Edition . Its conclusion: "... while the use of Fedora Cloud Base Images comes with some inconveniences and suffers from shortcomings in documentation, Fedora Cloud Base images and virt-install version 3 is a great combination for quickly and efficiently creating virtual machines for Fedora Server". Based on this finding, it seems worthwhile to explore and implement cooperation and possibly better mutual alignment, as discussed on the March 3, 2021 IRC meeting .
Resume as of June 2021
After 6 months, this idea has to be assessed as unrealisable.
According to Cloud Image WG members, the factual differences between the runtime environments are so signifikant that a Fedora server can never be built in a Cloud Image . Interest in cooperation on the part of Cloud WG members is very weak at best . And discussions should preferably cover technical features and implementations .
Alternative Fedora Server VM image provider
 <mattdm> Also, I want to throw out my long-standing thing for anyone to pick up: merging in the Cloud Base image so it's basically just an alternate deploy of server (https://meetbot.fedoraproject.org/teams/serversig/serversig.2020-12-16-18.00.log.html 18:52:23)
 Setting up a VM on Fedora Server using Cloud Images and virt-install version 3 (https://fedoramagazine.org/setting-up-a-vm-on-fedora-server-using-cloud-images-and-virt-install-version-3/)