The answer is NO defragmentation for both – defragmentation also generates more I/O to the disk. This could be more of a concern to customers than any possible performance improvement that might be gained from the defrag. I should point out that I have read that, internally at VMware, we have not observed any noticeable improvement in performance after a defragmentation of Guest OSes residing on SAN or NAS based datastores. I also want to highlight an additional scenario that uses an array based technology rather than a vSphere technology. If your storage array is capable of moving blocks of data between different storage tiers (SSD/SAS/SATA), e.g. EMC FAST, then defragmentation of the Guest OS doesn’t really make much sense. If your VM has been running for some time on tiered storage, then in all likelihood the array has already learnt where the hot-blocks are, and has relocated these onto the SSD. If you now go ahead and defrag, and move all of the VM’s blocks around again, the array is going to have to relearn where the hot-spots are