Hardware virtualization is a challenge. Each hypervisor has its own internal structure and resources for handling it. Without these things, each virtual machine would suffer terribly with regard to performance. VMware ESXi uses the concept of rings. They refer to the rings as rings of privilege.
Ring 0 is reserved for the ESXi hypervisor operating system and has the highest privilege. The hypervisor reserves this so that it can have direct access to the physical hardware. The hypervisor kernel running in Ring 0 creates and manages virtual machines and hardware resources. In terms of server architecture, this is similar to kernel space. So, for the most part, the ESXi hypervisor runs in Ring 0.
Rings 1-3 are where the virtual machines run. In terms of server architecture, this is similar to user space. Your virtual machines and applications run in the higher level rings. You can have multiple higher level rings running on top of Ring 0.
The following diagram shows the structure...