You can add, change, or configure CPU resources to improve virtual machine performance. You can set most of the CPU parameters when you create virtual machines or after the guest operating system is installed. Some actions require that you power off the virtual machine before you change the settings.

VMware uses the following terminology. Understanding these terms can help you plan your strategy for CPU resource allocation.

The CPU, or processor, is the component of a computer system that performs the tasks required for computer applications to run. The CPU is the primary element that performs the computer functions. CPUs contain cores.
CPU Socket
A CPU socket is a physical connector on a computer motherboard that connects to a single physical CPU. Some motherboards have multiple sockets and can connect multiple multicore processors (CPUs).
A core contains a unit containing an L1 cache and functional units needed to run applications. Cores can independently run applications or threads. One or more cores can exist on a single CPU.
An AMD processor corelet is architecturally equivalent to a logical processor. Certain future AMD processors contain multiple compute units, each of which has several corelets. Unlike a traditional processor core, a corelet lacks a complete set of private, dedicated execution resources. So, the corelet shares some execution resources, such as an L1 instruction cache or a floating-point execution unit, with other corelets. AMD refers to corelets as cores. However, these corelets are unlike traditional cores and they are called corelets in VMware documentation to make resource sharing more apparent.
Some cores can run independent streams of instructions simultaneously. In existing implementations, cores can run one or two software threads at one time by multiplexing the functional units of the core between the software threads, as necessary. Such cores are called dual or multithreaded.
Resource sharing
Shares specify the relative priority or importance of a virtual machine or resource pool. If a virtual machine has twice as many shares of a resource as another virtual machine, it is entitled to consume twice as much of that resource when the two virtual machines are competing for resources.
Resource allocation
You can change CPU resource allocation settings, such as shares, reservation, and limit, when available resource capacity does not meet demands. For example, if at year end, the workload on accounting increases, you can increase the accounting resource pool reserve.
vSphere Virtual Symmetric Multiprocessing (Virtual SMP)
Virtual SMP or vSphere Virtual Symmetric Multiprocessing is a feature that enables a single virtual machine to have multiple processors.