Limit specifies an upper bound for CPU, memory, or storage I/O resources that can be allocated to a virtual machine.
A server can allocate more than the reservation to a virtual machine, but never allocates more than the limit, even if there are unused resources on the system. The limit is expressed in concrete units (megahertz, megabytes, or I/O operations per second).
CPU, memory, and storage I/O resource limits default to unlimited. When the memory limit is unlimited, the amount of memory configured for the virtual machine when it was created becomes its effective limit.
In most cases, it is not necessary to specify a limit. There are benefits and drawbacks:
Benefits — Assigning a limit is useful if you start with a small number of virtual machines and want to manage user expectations. Performance deteriorates as you add more virtual machines. You can simulate having fewer resources available by specifying a limit.
Drawbacks — You might waste idle resources if you specify a limit. The system does not allow virtual machines to use more resources than the limit, even when the system is underutilized and idle resources are available. Specify the limit only if you have good reasons for doing so.