The Oracle VM hypervisor is a type 1 hypervisor. A type 1 hypervisor is bare-metal hypervisor which means that it will run directly on the hardware, also called a native hypervisor. The advantage of a type 1 hypervisor against a type 2 hypervisor which is a software package running in a operating system is that it can directly deal with the hardware and that it is not depending on the underlaying operating system.By a type 2 hypervisor you will see that a I/O request will travel from the guest operating system to the hypervisor who will give it to the host operating system who will deal with the actual I/O operation. The host operating system will return the resulting message to the hypervisor and he will return it to the guest operating system.
With a type 1 hypervisor you eliminate the host operating system in this process and by doing so operations will speed up. Also stability will increase because of the fact to you will no longer have to deal with possible incorrect fault handling or bottlenecks in the host operating system. This is one of the main reasons that virtualization vendors are stepping away from type 2 hypervisors and start working on type 1 hypervisors.
A second advantage is that you no longer have the need to maintain and purchase a host operating system as the type 1 hypervisor will be your lowest layer between the guest operating systems and the hardware. This is placing the XEN and Oracle VM in the advantage. The type 1 hypervisor is originally developed as part of IBM CP/CMS developed by the IBM Cambridge Scientific Center. CP/CMS is a time-sharing operating system of the late 60s and early 70s, known for its excellent performance and advanced features.