Templates are master copies of virtual machines that you can use to deploy virtual machines that are customized and ready for use. Templates promote consistency throughout your vSphere environment. Content libraries support only OVF templates. As a result, VM and Vapp templates are converted to OVF files when you upload the to a content library. You can use the templates to deploy virtual machines and vApps in the vSphere inventory.
VM Templates in Content Libraries
A VM template is a template of a virtual machine. You create a VM template by cloning a virtual machine or another VM template into a template. The VM templates that exist in a VM template folder differentiate from the VM templates that exist in a content library. A VM template that resides in a content library is in OVF format and if you export it to your local system it is saved as an .ovf file. The VM templates that exist in a VM template folder are not in OVF format but if you clone them to content library, the resulting template is in an OVF format.
vApp Templates in Content Libraries
A vApp template is a template of a vApp, which can contain multiple virtual machines or multiple vApps. vApp templates are inventory objects that exist only in content libraries. A vApp template that resides in a content library is in OVF format. Because the OVF format is actually a set of files, if you export the template, all the files in the OVF template library item (.ovf, .vmdk, .mf) are saved to your local system.
You can use VM templates and vApp templates to deploy virtual machines and vApps to a destination object such as a host or a cluster.