VMware networks works by loading a small, efficient operating system, hypervisor directly on the host hardware. The VMware hypervisor has a small footprint and is extremely efficient, with a very small overhead. Device drivers for nearly all major brand devices are available from VMware. These are loaded during the configuration process.
The client operating systems, such as Microsoft Server 2008, Microsoft Small Busines Server, Linux varieties, etc. are then set up as virtual machines, working directly with the VMware layer rather than with the actual hardware. This allows replacement of hardware to be very simple. If the hardware is replaced, VMware is reconfigured for the new hardware, and the virtual guest operating systems see no change whatsoever and are immediately able to boot and operate.
VMware's desktop software runs on Microsoft Windows, Linux, and Mac OS X, while its enterprise software hypervisors for servers, VMware ESX and VMware ESXi, are bare-metal hypervisors that run directly on server hardware without requiring an additional underlying operating system.
VMware could be used on server also for Data Center Virtualization, for workstation purpose please have look on given link
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