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From VMware documentation, the limits are

• ESX/ESXi 4.0 can support up to 1TB of RAM
• ESX/ESXi 4.0 can support up to 64 logical CPUs
• ESX/ESXi 4.0 can support up to 512 Virtual CPUs per host
• ESX/ESXi 4.0 can support up to 320 virtual machines per host

CPU

With the advent of multi-core CPUs, it has become easier and cheaper to increase the number of CPUs in a host server. Nowadays, almost all servers come with two or four cores per physical CPU. A good rule of thumb is that four single CPU VMs can be supported per CPU core. This can vary by as much as 1-2 per core, and up to 8-10 per core based on the average CPU utilization of applications running on VMs.

A common misconception with virtual servers is that a VM can utilize as much CPU megahertz as needed from the combined total available. For example, a four CPU, quad core 2.6 GHz would have a combined total of 20,800 megahertz (8 x 2.6 GHz). A single vCPU VM however, can never use more megahertz then the maximum of one CPU/core. If a VM has 2 vCPUs, it can never use more megahertz than the maximum of each CPU/core. How many cores needed will also depend on whether multiple vCPU VMs are used or not.

You should always have at least one more core than the maximum number of vCPUs that will be assigned to a single VM. For example, don’t buy a two processor dual-core server with a total of four cores and try to run a four vCPU VM on it. The reason being that the CPU scheduler of the hypervisor needs to find 4 free cores simultaneously each time the VM makes a CPU request. If there are only a total of four available cores, the performance will be very slow. My recommendation would be to use quad core CPUs because more cores provide the CPU scheduler with more flexibility to process requests.