ESX vSphere 4.0 has a lot of new features and enhancements compared to previous version of ESX 3.5 Virtual Infrastructure. For more information on vSphere's new features check out http://www.vmware.com/support/vsphere4/doc/vsp_40_new_feat.html.
However we feel that you can justify the upgrade to vSphere for just one reason alone - performance. With vSphere 4.0 VMware moved from a 32 bit to a 64 bit Hypervisor. We suspect the move to a 64 bit Hypervisor is the primary reason for the performance increase. The result is significantly improved performance on the same hardware, especially during CPU intensive operations. With vSphere 4.0 you will need an ESX host that supports hardware virtualization both in the CPU and BIOS. This is regardless if you want to run an x64 Virtual Server Guest or not. In our unscientific test, the Exchange Management Console (EMC) running on a Virtual Server Guest on ESX 3.5 took about 30 seconds to load after the EMC files where already cached. After the upgrade to vSphere/ESX 4.0 the EMC now loads in 12 seconds. During the EMC load the Virtual Server Guest CPU utilization is at 100%. This performance increase is just with the vSphere Upgrade alone on the same ESX server with no hardware changes.
We’ve also noticed significant performance increase with SQL Server – especially when using the x64 version. This is especially true when adding additional CPU’s to the virtual server guest. With previous versions of ESX, going from one to four virtual CPUs didn’t have that much effect on the virtual server performance. With vSphere 4.0 upgrading the virtual server guest from one to four CPUs made the virtual server run significantly faster. With previous versions of ESX, we typically increased the virtual server’s CPU share to provide better performance. With ESX 4.0 we’ve found better increases by upgrading from one to four CPUs with SQL Server Virtual Guests. Of course there are other factors to consider, like the number of CPUs on the ESX host, the number of cores in each CPU and the current CPU load on the ESX host. Most of the ESX hosts we have installed are two-socket, quad-core ESX hosts. We have one client that had a Virtual Guest SQL Server Report process that took about 12 minutes to run. After upgrading the SQL Server Virtual Server Guest from one to four CPUs that same report ran under 5 minutes. If you need to increase the performance of a SQL Server Guest running on VMware ESX upgrade to vSphere 4.0 and consider increasing the CPUs on the virtual server guest from one to four processors.