What happens if I allocate an incorrect number of VM resources?
Servers provide only a finite number of CPU cores and cycles and a finite amount of memory space and network bandwidth. Virtualization allows multiple workloads to simultaneously operate on the server. It also organizes and increases resource utilization by allowing one physical server to do more work. It does not, however, create additional VM resources, which causes a resource allocation dilemma for data center administrators.
Over-allocating resources creates unused and ultimately wasted resources. This situation, though not harmful to the server or its workloads, reduces the server's consolidation potential -- the total number of VMs the physical server can support.
Under-allocating resources creates a more serious situation. A lack of resources starves the VM, reducing or even stopping performance entirely. For example, a VM and application with inadequate CPU cycles might run slowly or erratically, and a VM with insufficient memory might rely on disk-based swap files, which could dramatically reduce performance.
Further reading on VM resource allocation
Managing vSphere VM host resources
Common VM provisioning mistakes
The dynamic nature of virtualized resources complicates matters even further. For example, an application may receive more users over time, which would increase its network bandwidth demands beyond the original allocation. Application upgrades may also incur additional CPU or memory demands. It's important to monitor resource use and application performance on an ongoing basis and adjust resources as necessary.
Dig deeper on Server consolidation and improved resource utilization
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