What is a vApp?
A vApp is a container in vSphere. It works the same way as a resource pool, but has extra options that help define a more structured approach to hosting virtual machines. With vApps you can build application stacks of virtual machines that have a relations with one another.
The most common example is always the three tiered app; a webserver, application server and a database server. With a vApp these virtual machines can be grouped together and besides grouping them together you can also control the startup order of the VMs in the vApp and allocate a specific amount of resources to the vApp.
Note : vSphere vApps are not the same as vCloud vApps! Both group workloads together, but they are not the same thing.
The allocation of resources for a vApp works with the same construct as that of a resource pool. The vApp can be allocated a specific amount of CPU and RAM resources. By default the vApp is set to unlimited and resources are expandable if needed, just like a resource pool. These settings can be changed in the same way as with normal resource pools. Reservations, limits and shares can be defined on a vApp level and can help to allocates resources depending on the requirments of the application stack.
VMs in a vApp share the resources that have been allocated to the vApp only with the other VMs in the vApp. In this way VMs are isolated from other VMs, vApps and resource pools outside of its own vApp. When resource contention takes place all VMs in a vApp will have to compete over the amount om resource that are available to the vApp.
If expendable reservations are configured, the vApp can allocate more resources if the parent resource pool has those available. However if there are no resources available the VMs in the vApp will need to compete over the resource available to the vApp. This is where normal resource mechanisms apply such as shares, limits and reservations.
Lets take the vApp with the three tier vApp (web-app-db) as an example. By default all VMs are equal in a vApp. However the database is the most important VM in this three tiered vApp and needs to be given enough resources when resource contention takes place. To define this one can set the shares for the database VM on High. By default this is set to Normal. This will give the database VM twice as much resource shares as the other two VMs in the vApp. This will elevate its priority within the vApp and provide it with half of the resources when resource contention takes places. In this way one can set a specific priority to VMs within a vApp.
More information about the allocation of resources within vSphere can be found in the book VMware vSphere 5 Clustering Technical Deepdive by Frank Denneman & Duncan Epping.