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host CPU is overcommitted

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in help file in CPU WORKLOAD  from OPs 5.6 is stated:

 

In the Host CPU line, examine the number of virtual machines in the Remaining Capacity (VMs) column.

 

My understand is host is responsible for memory allocation + overhead of set up so if we have 4 G host memory (for example)and 3 vm that each of them has 2 G, host just service to one vm Although 2 G is remainig on host.

 

Becuse Of this subject that i undestand , above table is saying check Remainig Capacity. Is it true?


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