Great question! I just gave a presentation at the TechTarget Virtualization 101 seminar where I talked about this
very issue. The answer to the question is actually the same as it would be if you were working on a physical server: What are the disk I/O characteristics of the applications you are going to be running? For example if the applications are read-intensive, like LDAP servers, then a RAID-5 works fine. However if the applications are write-intensive, then a RAID-5 that calculates parity on every write may be too expensive in terms of I/O to be a valid choice. So if all of the VMs you are running have the same disk characteristics then you can create one big LUN with one big VMFS. However if the VMs have different disk I/O characteristics, which is likely, then you should probably create at least two LUNs: one optimized for reads and one optimized for writes. You should also create VMFS file systems on each LUN.
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