Every virtual machine running on an ESX host consumes some memory overhead additional to the current usage of its configured memory. This extra space is needed by ESX for the internal VMkernel datastructures like virtual machine frame buffer and mapping table for memory translation (mapping physical virtual machine memory to machine memory). Two kinds of virtual machine overhead exists:
Static overhead is the minimum overhead that is required for the virtual machine startup. DRS and the VMkernel uses this metric for admission control and VMotion calculations. The destination host must be able to back the virtual machine reservation and the static overhead otherwise the VMotion will fail.
Once the virtual machine has started up, the virtual machine monitor (VMM) can request additional memory space. The VMM will request the space, but the VMkernel is not required to supply it. If the VMM does not obtain the extra memory space, the virtual machine will continue to function but this can lead to performance degradation. The VMkernel treats virtual machine overhead reservation the same as VM-level memory reservation and it will not reclaim this memory once it used.
Overhead memory used in admission control
As mentioned before, DRS and the VMkernel will not allow the virtual machine to be powered up if reservations cannot be guaranteed, this means that the effective memory reservation for a virtual machine is the user configured memory reservation (VM-level reservation) plus the overhead reservation.
Resource pool memory reservations
This means that during the design phase of a resource pool, the memory overhead of a virtual machine must be included in the calculation of the memory reservation specified on the resource pool. The behavior of dynamic overhead must also be taken into account.
Table 3.2 of the vSphere resource management guide list the overhead memory on virtual machines. VMware vSphere Online Library - Table 3.2 overhead memory
Please be aware of the fact that memory overheads are growing with each new release of ESX, so keep this in mind when upgrading to a new version. Verify the documentation of the virtual machine memory overhead and check the specified memory reservation on the resource pool.