A virtual machine can exist as a standalone machine or it can exist within a vApp.
A virtual machine is a software computer that, like a physical computer, runs an operating system and applications. The virtual machine consists of a set of specification and configuration files and is backed by the physical resources of a host. Every virtual machine has virtual devices that provide the same functionality as physical hardware are more portable, more secure, and easier to manage. Virtual machines can be standalone, or they can exist within a vApp. A vApp is compound object composed of one or more virtual machines as well as one or more networks.
The following figure shows the different options when creating a virtual machine. You can create a standalone virtual machine. In this case, the virtual machine is directly connected the organization VDC. Or, you can create a virtual machine within a vApp. Ceating a virtual machine inside of a vApp allows you to group together multiple virtual machines and their associated networks. vApps allow you to build complex applications, and save them for future use in a catalog.