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You could also be paying the penalty of over sizing your VM by allocating too many vCPUs. When this is done the vm spend more time in trying to get a CPU ready state than actually using the processor. This will show up on the VM as the processor going to 100% but on the VM host low CPU utilization. What is happening is that the VM host scheduler is spending time getting the provisioned number of CPUs available for the the VM to use. You can see this in the advance section of the Performance graph for CPU in vCenter for the VM. By selecting only the Ready and Usage counters and only selecting the server target (not all the CPU objects) If the the Ready counter is higher than the Usage counter (most of the time or when under load) then you have a problem. If the Ready counter is > 400 milliseconds will probably have an issue. This graph show an example where I had 4 vCPU provisioned and then reduced it 1. Notice how the counters are now inverted. After the change the VM ran much better and the CPU only occasionally went to 100% This blog has good info on this- especially if you dig into some of the comments/replies: http://www.joshodgers.com/2012/07/22/common-mistake-using-cpu-reservations-to-solve-cpu-ready/
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