Terremark CEO Manny Medina said the most significant difference is that the services will be hosted on VMware's vSphere platform, allowing customers who use that software to move applications and workloads between their internal data centers and an external provider.

Other service providers are buying into the message. Verizon Business, AT&T and Savvis were also at VMworld to promote application hosting services based on vSphere, although they have not signed onto vCloud Express.

Verizon Business and AT&T said they are aiming at the higher end of the market, where customers require service level agreements for critical business applications, while Savvis said it will offer multiple tiers of service for different types of workloads.

The services build on the vCloud vision that VMworld announced a year ago, in which companies can move workloads between their own data centers and those of service providers as demand for computing capacity fluctuates. But it is not without competition.

On Monday, developers of the Xen hypervisor announced the Xen Cloud Platform, an effort to create interoperability among virtualization platforms, so that customers would be able to move workloads from external cloud services to internal data centers without having to worry about which hypervisor is being used.