When deploying multiple isolated web applications on limited physical servers, the container-inside-VM approach presents an intriguing solution. Modern hypervisors like VMware ESXi or KVM already handle hardware virtualization efficiently, while containers (Docker, LXC) provide process isolation at the OS level.

The dual-layer virtualization does introduce measurable overhead:

• CPU: ~1-5% additional context switching
• Memory: ~100MB per container for the Docker daemon
• Network: ~2-8% throughput reduction with bridge networking

# Sample docker-compose.yml for multi-app deployment
version: '3.8'
services:
  customer1_app:
    image: nginx:alpine
    ports:
      - "8080:80"
    mem_limit: "256m"
    
  customer2_app:
    image: nginx:alpine 
    ports:
      - "8081:80"
    mem_limit: "256m"

For production deployments in this architecture:

1. Use --network=host mode to bypass Docker networking overhead
2. Configure VM with vm.swappiness=1 in sysctl.conf
3. Mount volumes with :cached flag on macOS/Windows hosts

The nested virtualization approach actually improves security isolation:

• VM provides hardware-level separation
• Containers add kernel namespaces protection
• Combined SELinux/AppArmor profiles enhance defense

For mission-critical deployments, consider Kubernetes operators like KubeVirt for hybrid VM-container management.

When dealing with multi-tenant web applications on limited hardware, the container-inside-VM approach presents an interesting solution space. Let's examine the technical considerations:

# Sample VM configuration for container hosting
sudo apt-get update
sudo apt-get install -y docker.io
sudo systemctl enable --now docker

Recent tests on AWS EC2 instances show:

• Native Docker: 98-99% of host performance
• Docker in VM: 90-95% of host performance
• Full VMs: 80-85% of host performance

Here's a docker-compose.yml example for multi-tenant isolation:

version: '3'
services:
  tenant1:
    image: nginx
    ports:
      - "8080:80"
    networks:
      - tenant1-net
      
  tenant2:
    image: nginx
    ports:
      - "8081:80"
    networks:
      - tenant2-net

networks:
  tenant1-net:
    driver: bridge
  tenant2-net:
    driver: bridge

When nesting containers in VMs:

• Use VM-level isolation for different security domains
• Implement resource quotas at both VM and container levels
• Consider SELinux/AppArmor profiles for defense in depth

For high-density deployments, consider:

# Kubernetes namespaces for isolation
kubectl create namespace tenant1
kubectl create namespace tenant2

However, the VM+container approach provides stronger isolation boundaries while maintaining better density than pure VMs.