The number of VMs that can run on ESXi is not infinite and the optimization of the resources ensures best performance. As compared to the physical world, where each server is often equipped with more resources than it actually needs, in a virtualized environment, you can allocate suitable resources to a VM based on its role and function.

An FTP server, for example, doesn't need to be equipped with a dual processor and 6 GB of RAM because the resources will be underutilized. Allocating a suitable amount of RAM and a correct number of CPUs, you can obtain best performance, saving resources for other VMs. Understanding how to manage and reallocate resources is then a key point to avoid overcommitment of resources (more demand than available capacity) that can compromise the entire infrastructure functionality.

Hosts and clusters (a group of hosts where overall CPUs and RAM are owned by the cluster) as well as datastore clusters (a group of datastores) provide physical resources to the infrastructure. Default settings configured on a VM during creation are generally suitable, but sometimes may not ensure a correct allocation of resources. You can always edit the VM settings later on to adjust assigned resources to avoid issues due to lack of resources.