To perform vMotion, environments with shared storage are not required. For example, you can migrate a running VM between ESXi hosts with only local storage. When migrating a VM cross-cluster, the target cluster VM might not have access to the source cluster's storage.

Let's have a look at the VM that runs on a local datastore on the esxi-prod-1 hypervisor. If we choose to migrate the compute resource only, the wizard will not allow us to migrate the VM to any other ESXi hypervisor, since the VM is backed up with local storage:

However, if we select Change both compute resource and storage, we will be able to migrate the VM to a different ESXi hypervisor and shared storage: