The number of VMs that can run on ESXi is not infinite, and optimization of resources ensures the best performance. In contrast to the physical world, where each server is often equipped with more resources than it 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. By allocating a suitable amount of RAM and a suitable number of CPUs, you can obtain the best performance, saving resources for other VMs. Understanding how to manage and reallocate resources is then a key way to avoid overcommitment of resources (that is, when you have more demand than the available capacity), which can compromise the entire infrastructure's functionality.

Hosts and clusters (a group of hosts where the cluster owns the overall CPUs and RAM), 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 the correct allocation of resources. You can always edit the VM settings later on to adjust assigned resources in order to avoid issues due to lack of resources.