Generally, storage virtualization refers to a logical abstraction of physical storage resources and capacities from virtual machines and their applications. ESXi provides host-level storage virtualization.

In vSphere environment, a traditional model is built around the following storage technologies and ESXi and vCenter Server virtualization functionalities.
Local and Networked Storage
In traditional storage environments, the ESXi storage management process starts with storage space that your storage administrator preallocates on different storage systems. ESXi supports local storage and networked storage.
See Types of Physical Storage.
Storage Area Networks
A storage area network (SAN) is a specialized high-speed network that connects computer systems, or ESXi hosts, to high-performance storage systems. ESXi can use Fibre Channel or iSCSI protocols to connect to storage systems.
See Overview of Using ESXi with a SAN.
Fibre Channel
Fibre Channel (FC) is a storage protocol that the SAN uses to transfer data traffic from ESXi host servers to shared storage. The protocol packages SCSI commands into FC frames. To connect to the FC SAN, your host uses Fibre Channel host bus adapters (HBAs).
See Using ESXi with Fibre Channel SAN.
Internet SCSI
Internet iSCSI (iSCSI) is a SAN transport that can use Ethernet connections between computer systems, or ESXi hosts, and high-performance storage systems. To connect to the storage systems, your hosts use hardware iSCSI adapters or software iSCSI initiators with standard network adapters.
See Using ESXi with iSCSI SAN.
Storage Device or LUN
In the ESXi context, the terms device and LUN are used interchangeably. Typically, both terms mean a storage volume that is presented to the host from a block storage system and is available for formatting.
See Target and Device Representations and Managing Storage Devices.
Virtual Disks
A virtual machine on an ESXi host uses a virtual disk to store its operating system, application files, and other data associated with its activities. Virtual disks are large physical files, or sets of files, that can be copied, moved, archived, and backed up as any other files. You can configure virtual machines with multiple virtual disks.
To access virtual disks, a virtual machine uses virtual SCSI controllers. These virtual controllers include BusLogic Parallel, LSI Logic Parallel, LSI Logic SAS, and VMware Paravirtual. These controllers are the only types of SCSI controllers that a virtual machine can see and access.
Each virtual disk resides on a datastore that is deployed on physical storage. From the standpoint of the virtual machine, each virtual disk appears as if it were a SCSI drive connected to a SCSI controller. Whether the physical storage is accessed through storage or network adapters on the host is typically transparent to the VM guest operating system and applications.
VMware vSphere ® VMFS
The datastores that you deploy on block storage devices use the native vSphere Virtual Machine File System (VMFS) format. It is a special high-performance file system format that is optimized for storing virtual machines.
See Understanding VMFS Datastores.
An NFS client built into ESXi uses the Network File System (NFS) protocol over TCP/IP to access an NFS volume that is located on a NAS server. The ESXi host can mount the volume and use it as an NFS datastore.
See Understanding Network File System Datastores.
Raw Device Mapping
In addition to virtual disks, vSphere offers a mechanism called raw device mapping (RDM). RDM is useful when a guest operating system inside a virtual machine requires direct access to a storage device. For information about RDMs, see Raw Device Mapping.