The following issue was submitted to Red Hat regarding the Xen PV and VNC console issue:
https://bugzilla.redhat.com/show_bug.cgi?id=1123347. It was marked as CLOSED DUPLICATE of https://bugzilla.redhat.com/show_bug.cgi?id=1120695. The last one is marked as CLOSED WONTFIX with the following comment:“RHEL guest running on Xen PV is not supported and both CONFIG_XEN_FBDEV_FRONTEND and CONFIG_XEN_PCIDEV_FRONTEND are not being used on HVM."
CentOS 7.x version
The CONFIG_XEN_FBDEV_FRONTEND option is enabled in an alternative kernel from CentOS, which is located in CentOS Plus repo. It was decided to switch to the CentOS Plus kernel. Corresponding repositories were enabled/added to install/upgrade the kernel-plus* packages only. Native RHEL/CentOS 7.x kernel* packages were removed. The grubby was downgraded and excluded from repositories to disable its upgrade until the issue is fixed.
The VNC console issue is related to VMs on Xen HV only. You can use a kernel from either Base or Plus repo for KVM HV.
In templates OnApp uses default OS and kernel configuration from distributive vendors. In case of CentOS 7 and RHEL 7 distributions, VNC console functionality was broken. The issue is related to the CONFIG_XEN_FBDEV_FRONTEND option which is disabled in default kernels for CentOS 7 and RHEL 7.