A virtualized computing system supports the execution of a plurality of virtual machines, where each virtual machine supports the execution of applications therein. Each application executes within a container that isolates the application executing therein from other processes executing on the computing system. A hierarchy of virtual machine templates is created by instantiating a parent virtual machine template, the parent virtual machine template having a guest operating system and a container. An application to be run in a container is determined, and, in response, the parent virtual machine template is forked to create a child virtual machine template, where the child virtual machine template includes a replica of the container, and where the guest operating system of the parent virtual machine template overlaps in memory with a guest operating system of the child virtual machine template. The application is then installed in the replica of the container.