ESX Disk Space Allocation

Unlike VMware Server and Virtual Server 2005, VMware ESX Server requires that you pre-allocate the entire guest’s hard drive when you create it. The upside is less disk fragmentation and better performance for the guest, but the downside is this requires more disk space. This is especially true if you plan to create several base images to speed up the process of creating new guests on ESX. This may require more disk space on your ESX server. Plan accordingly.

— Alan Sugano