With the Photon open source project, VMware hopes to build a community around the practice of running containerized applications in virtual environments. Photon is an umbrella term for multiple projects that include ways to deploy containers on a VM, using Photon OS, as well as ways to deploy containers as VMs on VMware infrastructure.
Photon OS is a small-footprint Linux container host designed to run on virtual machines and tuned for VMware hypervisors. VMware has certainly embraced the Docker movement in a big way, and not just on VMware. You can run Photon OS on other hypervisors including Google Compute Engine and Amazon EC2. However, you cannot install Photon OS on a physical server.