Yes this has been discussed in the past but I am too lazy to search for the thread so I will answer again
The major difference between ESX and ESXi is that ESX has something called the Service Console - this is in essence a RHEL based virtual machine that provides a method to control to control and manage the vmkernel, the hypervior providing the virtualization of the physical resources. In ESXi this functionality has been incorporated into the vmkernel. By doing this the need for a secondry operating system, and the associated patching. has been eliminated increasing the security ESXi. The down side is many software partners have written agents for the service console which are now being reworked to work with in ESXi. In the interim VMware released the Remote CLI which is a virtual appliance that provides ESXi a service console like functionality. Other than this ESXi and ESX both have the same functionality in regards to vmotion, DRS, HA and related VMware tools and add ons including managed by Virtual Center as king you have the licenses.
ESXi is given away free for two reasons - 1) our customers can experience datacenter class virtualization with out having to pay anything and 2) our competitors are also giving away their virtualization engine for free and are charging for service amd spport and to license for higher order functionality.
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