We are having a performance issue that we cannot explain with our VMWare environment and I am hoping someone here may be able to help. We have a web application that uses a databases backend. We have an SQL 2005 Cluster setup on Windows 2003 R2 between a physical node and a virtual node. Both physical servers are identical 2950's with 2x Xeaon x5460 Quad Core CPUs and 64GB of memory, 16GB allocated to the OS. We are utilizing an iSCSI San for all cluster disks. The problem is this, when utilizing the application under a repeated stress testing that adds CPUs to the cluster nodes, the Physical node scales from 1 pCPU to 8 pCPUs, meaning we see continued performance increases. When testing the node running Vsphere, we have the expected 12% performance hit for being virtual but we still scale from 1 vCPU to 4 vCPUs like the physical but beyond this performance drops off, by the time we get to 8 vCPUs we are seeing performance numbers worse than at 4 vCPUs. Again, both nodes are configured identically in terms of hardware, Guest OS, SQL Configurations etc and there is no traffic other than the testing on the system. There are no other VMs on the virtual server so there should be no competition for resources. We have contacted VMWare for help but they have not really been any suggesting things like setting SQL Processor Affinity which, while being helpful would have the same net effect on each box and should not change our results in the least. We have looked at all of VMWare's SQL Tuning guides with regards to VSphere with no benefit, please help!