VMware/vSphere - CPU READY and CPU USAGE put simply

I was asked this question by my colleagues and after answering it with the official VMware explanation, they still didn't quite get it. (Yeah, actually if I look at it without the necessary background info, I'd probably not get it either...)

The following visualization helped put it simply:

CPU USAGE and CPU READY - What is it?

CPU Ready = % of time there is work to be done for VMs, but no physical CPU available to do it on (all host CPUs are busy serving other VMs). One rule of thumb that I heard is that below 5% Ready is normal; anything between 5% and 10%, best keep an eye on the VM and the host. Over 10% (for extended periods) you should be planning on taking some action.

-           

-          CPU Usage = raw, absolute amount of CPU used by corresponding VM at the given moment.

References:

http://vmfaq.com/entry/42/

The amount of time a virtual machine waits in the queue in a ready-to-run state before it can be scheduled on a CPU is known as ready time.

The higher the ready time is, the slower the virtual machine is performing. The ready time should preferably be as low as possible. Virtual machines that are allocated multiple cpus or have high timer interrupts are more frequently seen with high ready time values.