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Every VM carries a full guest operating system — typically 512 MB or more of kernel, init and services — while containers share the host kernel and add only a few megabytes of runtime state. Across sixty small workloads that is roughly 30 GB of duplicated operating system, which is the core density argument for containers over VMs.
Overhead comparison
VM total = workloads x (workload memory + guest OS memory); container total = workloads x (workload memory + runtime overhead) + one shared kernel
No. They share the host kernel, so a kernel vulnerability crosses the boundary. VMs, or sandboxed runtimes such as gVisor and Kata, give stronger isolation.
For untrusted multi-tenant code, for workloads needing a different kernel or kernel modules, and where regulatory separation is mandated.