Before we talk about Resource Pool we need to know what are resources in VMware terminology. Resources are

• CPU's
• Memory
• Disk (Manages which proportional share mechanisim)
• Network (are controlled by using Network-traffic shaping)

Resources are provided by ESX host and they are consumed by VM's. if ESX host are clustered, then Cluster is actual resource provider.

Every VM will be allocated Memory and CPU resources, there are 3 settings in resource pool which influence as to what memory and CPU any VM would get.

RESERVATION:Reservation specified for the resource pool or VM, if the reservation is set to Zero (which is by default), it means no reservation is set. VM will not start if its reservation is not met or guaranteed. When reservations are not utilized ESX host can assign them to other VM's. Lets take example

You have VM's A and B. A & B is configured for 1GHZ reservation. Now during some days A only goes as far a 0.5 GHz, under such case B can use 1.5 GHz. But if B is using 1.5GHz and A is poweroff, Once A is powerON B has to give away 0.5 GHz

LIMIT:Specified limit for the VM, default is unlimited. Server can allocate more memory/CPU than reservation but it cannot assign more than it's limit. Applying limit will vary depending upon the circumstances or your design requirement.

It is recommended to apply limit, when you wish to manage few VM's and you know Max Memory/CPU utilization of these VM's applications. Because one you apply limit, even if the resource on one system is under utilize and other machine is going to require more CPU/Memory sometime, it won't be able to get that idle resource and there are chance paging would start happening.

SHARES: Number of shares determine which VM will get resources when there is competition for resources among VM's.Specifying shares makes sense only with regard to sibling virtual machines or resource pools, that is, virtual machines or resource pools with the same parent in the resource pool hierarchy.

The amount of resources represented by each share changes when a new virtual machine is powered on. This affects all virtual machines. Shares are typically specified as high, normal, or low. High, normal, and low specify share values with a 4:2:1 ratio.

For example:Two virtual machines run on a host with 8GHz. Both are set to Normal and get 4GHz each.A third virtual machine is powered on. It is set to High, which means it should have twice as many shares as the machines set to Normal. The new virtual machine receives 4GHz and the two other machines get only 2GHz each.

Share values default to:

• High — 2000 shares per virtual CPU, 20 shares per MB of virtual machine memory
• Normal — 1000 shares per virtual CPU, 10 shares per MB of virtual machine memory
• Low — 500 shares per virtual CPU, 5 shares per MB of virtual machine memory

By going by above defination, if we've VM with 2 CPU's and 1 GB RAM and shares is defined as High, so this VM is going to get

• 2000 Shares x 2 CPU's =Shares of CPU Power
• 20 Shares x 1024MB=Shares of Memory

Mind you, this is just shares and they will be useful in cases where VM is competing either for CPU or Memory resources.

Resource pool is used to distribute CPU's and Memory across VM. resource pools can have child resource pool or VM or Both.Resource pool or VM which are at the same level of heirarchy, it is called sibling. Picture below gives very good information about the relation.

You can actually create resources pool as per the department's requirement and can guarantee that particular resource pool will provide required processing power when the condition demands.

You don't need to configure resources to each VM, in fact you apply common settings across group of VM using resource poo. In above figure RP-Marketing is a resource pool, all resources defined in it, will be automatically applied to VM's under it, with configuring such setting for each VM.

In order to really leverage the power of resource pools, Group hosts into cluster. When you create cluster, resource are managed at the cluster level rather host level. In short resources on each host are combined into one. This one resource is total resource which can be allocated to all VM's under that cluster. Figure below explains it briefly.