A pretty common misconception is that VMWare is based on Linux. That isn’t “officially” true. While there have been some rumors otherwise the official word from VMWare is that ESX (their bare-metal product) boots the system on a small “micro-kernel” they call the VMKernel. According to everything that I can find VMWare runs their OS off of their own manufactured product and use Linux to interact with or manage their product.
With ESXi they have stripped out large chunks of that the managing OS that is Linux and are working on beefing up their own OS. The idea is a good one but if you were to strip out all off the management of the product would you still have a product? One of the things that makes ESX great is it’s ability to be easily managed. If you take that away what are you left with?
So I would say that VMWare isn’t based on Linux … mostly.
One person stepping through the architecture
VMWare forum discussing the topic