If I may prognosticate, stripped-down monolithic OSes running on hypervisors are the wave of the future. Look at VM/CMS for an extreme example: CMS is about as complex as MS-DOS, being a single-user single-tasking OS with no memory protection or security model. VM is the hypervisor. Together, they date to about 1968, or a little before if you include research systems.
A Service VM is one where an application runs directly on the 'bare metal' provided by the VM (that is, the whole point of a VM is to multiplex the hardware; it provides few or no abstractions as such). There's no guest OS as you'd think of one.
This idea also exists in exokernel designs:
In an exokernel, the guest OS is reduced to a library, like libc, which is (ideally) optimized for the specific application: Emacs has its own, Apache has its own, and so on. It's a half-step removed from the Service VM idea in that the applications themselves would still get to use the OS abstractions, unaware that the OS is basically gone.