The Virtualization Overhead gauge shows the percentage of CPU that is unavailable to this virtual machine because it is being consumed either by other virtual machines or by administration of the virtualization environment on the host. Use this gauge to determine whether the performance of the virtual machine is being degraded due to competition for the CPU from other virtual machines.
In a virtual environment, the physical CPU of a host is shared by virtual machines and the VMware Hypervisor. This means there can be multiple virtual machines wanting to use the physical CPU of the host at the same time. The result is that virtual machines may be ready to run but have to wait to be scheduled on a CPU. VMware calls this “ready time”. The Virtualization Overhead gauge shows the amount of ready time as a percentage of the theoretical maximum CPU available to the virtual machine.
Note: The maximum value displayed is 100% minus the amount of physical CPU that has been reserved (if any) for the virtual machine. CPU reservation is the minimum amount of CPU a virtual machine is guaranteed to receive. If there is a CPU reservation, you can see it on the CPU Utilization chart on the Virtualization drilldown.
For example, if a virtual machine has been assigned 20% CPU reservation, then the maximum value that could be displayed on the Virtualization Overhead gauge is 80%.