It’s been a while since Oracle started supporting OVM with Exadata Machine. It means you can virtualize your Exadata Machine using Oracle VM technology with no additional cost. Ideally, Oracle VM with Exadata machine should be use for database consolidation or isolation only but you are not restricted. You can use Exadata VMs to install other products like management or ETL tools but it’s not recommend to run major applications like SAP or EBS. Currently Exadata VM are only certified to Oracle enterprise Linux, may be in future Oracle will start supporting other operating systems. Please see below diagram to compare quarter rack Virtualized Exadata Machine with Bare Metal.
Virtualized Exadata machine architecture can be significantly different than the Bare Metal one. With Bare Metal install, you have one Oracle cluster for whole Exadata machine, unless you physically partition your Exadata machine. With Virtualized Exadata Machine you have 1 management domain (domO) and at least 1 user domain (domU) on each node, depending on the number of VM clusters being deployed. Management Domain (domO) is automatically created with 4 vCPU, 8 GB RAM, with no Oracle GRID and RDBMS software installed in it. Each user domain (domU) should be sized carefully based on the databases you are planning to host in future. With virtualized Exadata install, you only virtualize compute nodes and share storage between them. This also mean that all the VM clusters will have their own dedicated ASM disks groups and physical disks.