As Andre said, clones and templates are practically the same thing, but there are a few other differences. A VM template can support the provisioning of multiple VMs simultaneously. In other words, each "deployment" task will run concurrently in parallel. You can queue up multiple cloning operations, but the actual copy operation will only run one VM at a time. Another difference...vSphere now supports linked clones, which is a space-efficient copy of a VM. Within a linked-clone group, each clone is created almost instantly...sharing a snapshot of the source VM. The only additional space consumed would be disk writes that are unique to the clone. This feature is used heavily with VMware View when working with Automated Desktop Pools, and is available via VMware's APIs. The last functional different I can think of is that with a template you can have the image "prepped" and "sealed" via whatever means. It's meant for one purpose...to create new VMs from it...so you can sysprep, have scripts ready to run on 1st login, have an application configured in a default state waiting to be configured for the 1st time, etc. With a clone, things are usually already setup. While you can use vCenter's guest customization to do some basic things, templates tend to be more flexible for provisioning VMs from a "packaged" unit.