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So what's being shown off here? Clearly it's impressive that a web server VM is loaded so quickly, but what's the key? Is it a carefully configured Xen VM? Or is it the use of Erlang?

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This is an OS-less web server VM, basically an modified Erlang VM to run directly on "almost" bare-metal

Actually, we didn't modify Ericsson's Erlang VM, we have written our own.

Impressive, is that what Zerg is about? where can I find more information about this?

http://en.wikipedia.org/wiki/Zergling#Zerg or

http://knowyourmeme.com/memes/zerg-rush

Zerg is just a demo that shows how elastic and scalable could be OSless VMs even over current cloud infrastructure

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