It's very interesting for virtualized workloads because SR-IOV means you can assign the NVMe disk to different VMs directly and bypass the hypervisor. This is the same for NICs at 10/25/40/100 gigabit. There will be a significant performance drop if you don't use SR-IOV.
PS. I had a look on the guest side of thing just now because that is what Microsoft talked about.
Most OSs are virtualization aware. I had a look at debian running as guest under Xen with a clean install without any Xen guest tools. Debian installation automatically sense it's running on virtualized hardware and sets it's I/O scheduler to "none", thereby letting the host handle whatever I/O scheduling needed. This also makes sense because the guest doesn't know what kind of storage the host is using.