You can add large-capacity virtual disks to virtual machines and add more space to existing disks, even when the virtual machine is running. You can set most of the virtual disk parameters during virtual machine creation or after you install the guest operating system.
You can store virtual machine data in a new virtual disk, an existing virtual disk, or a mapped SAN LUN. A virtual disk appears as a single hard disk to the guest operating system. The virtual disk is composed of one or more files on the host file system. You can copy or move virtual disks on the same hosts or between hosts.
For virtual machines running on an ESXi host, you can store virtual machine data directly on a SAN LUN instead of using a virtual disk file. This option is useful if in your virtual machines you run applications that must detect the physical characteristics of the storage device. Mapping a SAN LUN also allows you to use existing SAN commands to manage storage for the disk.
To accelerate virtual machine performance, you can configure virtual machines to use vSphere Flash Read Cache™. For details about Flash Read Cache behavior, see the vSphere Storage documentation.
When you map a LUN to a VMFS volume, vCenter Server or the ESXi host creates a raw device mapping (RDM) file that points to the raw LUN. Encapsulating disk information in a file allows vCenter Server or the ESXi host to lock the LUN so that only one virtual machine can write to it. This file has a .vmdk extension, but the file contains only disk information that describes the mapping to the LUN on the ESXi system. The actual data is stored on the LUN. You cannot deploy a virtual machine from a template and store its data on a LUN. You can store its data only in a virtual disk file.