What is CPU virtualization?

CPU virtualization involves a single CPU acting as if it were multiple separate CPUs. The most common reason for doing this is to run multiple different operating systems on one machine. CPU virtualization emphasizes performance and runs directly on the available CPUs whenever possible. The underlying physical resources are used whenever possible and the virtualization layer runs instructions only as needed to make virtual machines operate as if they were running directly on a physical machine.

When many virtual machines are running on an ESXi host, those virtual machines might compete for CPU resources. When CPU contention occurs, the ESXi host time-slices the physical processors across all virtual machines so each virtual machine runs as if it has its specified number of virtual processors.