Quoting SearchServerVirtualization.com

David Marshall and Wade Reynolds

Even though VMware ESX Server is known for high performance, performance tweaks and a little know how can make it even better. In this series, we are examining 12 tips for top-notch ESX Server performance.

Tips one through four discussed VI3, host processors and memory, storage and host networking. Now we'll turn our attention to VM-to-host placement, remote access, virtual processors and memory and more.

Tip 5: Be aware of VM-to-host placement

Within an ESX 2.x environment, it is important to keep track of what is going on inside of the virtual machine. By distributing heavy load virtual machines on different hosts or by placing virtual machines that operate at different times throughout the day on the same host, you can increase performance of your virtual machines by reducing resource contention. This is a manual task when using VMware ESX Server 2.x.

Because virtual machines are easy to create and distribute, it's common to have a problem known as virtual machine sprawl. If it isn't managed properly, you can have unmanaged virtual machines out there that people forget about.

It's important to either shut down/power off or suspend unused virtual machines so that they aren't wasting valuable resources on the ESX Server. Even an idle virtual machine will chew up memory and processing power, taking it away from other virtual machines that could use it.

Upgrading to VI3 can help out with your VM-to-host placement problem. Rather than manually trying to figure out where a virtual machine best fits on which host server and with which other virtual machines, VI3's DRS and resource pool features will help do the job for you.

When deploying a virtual machine in VI3 with DRS, you no longer need to figure out which ESX Server is going to host the virtual machine. You simply assign the virtual machine to a resource pool. DRS will automatically move the virtual machine to the right ESX Server so that it can get the resources that it needs. DRS will automatically balance your virtual machines across all of the ESX Servers assigned to the resource pool, even after virtual machines are added, removed and modified.

If a virtual machine isn't getting enough resources, then DRS can automatically balance the virtual machine in the resource pool to ensure that all of the virtual machines are receiving enough resources. If a resource pool itself is running out of resources, additional resources can be added by simply adding additional ESX servers to the resource pool.

VI3's DRS feature requires VMotion capabilities to perform the automatic migrations. It can move virtual machines from one ESX Server to another without any downtime. It takes some of the guesswork out, and by doing so, virtual machine performance is optimized because the VM no longer has to deal with resource contention as it would if it were placed on an improper host server.

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Read the entire article, (Tip 6, 7 and 8) here.