ESXi provides several mechanisms to configure and adjust the allocation of CPU and memory resources to VMs. Thus, resource management configurations have a significant impact on VM performance.

If you expect flexibility in the total available resources, then use shares, not reservations. It will allocate resources fairly across the VMs. Even if you upgrade your hardware, each VM will stay at the same relative priority, using shares. The relative priority remains the same even though each share represents a larger amount of memory or CPU.

Remember that shares will only be effective in the case of resource contention. So, if you think you can have an immediate effect on the resources of a VM by increasing the number of shares, you are mistaken. Share values are used in order to determine the dynamic entitlement of a VM. Dynamic entitlement is used in order to determine fairness and also opportunistically distribute unused resources. Therefore, while shares are enforced during contention, their configured priority is also leveraged in non-contentious situations as well.

You may want to use reservations to specify the minimum amount of guaranteed CPU or memory. After all the resource reservations have been met, VMkernel allocates the remaining resources based on the number of shares and limits configured on the VM. If you choose to have a reservation for your VM, then just remember that you may limit the ability of the DRS cluster in regard to the placement of other VMs.

So carefully specify the memory limit and memory reservation. If these two parameters are misconfigured, users might observe ballooning or swapping, even when the host has plenty of free memory. For example, a VM's memory might be reclaimed when the specified limit is too small or when other VMs reserve too much host memory. If a performance-critical VM needs guaranteed memory allocation, the reservation must be specified carefully because it might affect other VMs.