DRS migration threshold allows you to specify which recommendations are generated and then applied (when the virtual machines involved in the recommendation are in fully automated mode) or shown (if in manual mode). This threshold is also a measure of how much cluster imbalance across host (CPU and memory) loads is acceptable.

Migration threshold is a measure of how much cluster imbalance is acceptable based on CPU and memory loads. The slider is used to select one of five settings that range from the most conservative (1) to the most aggressive (5). The further the slider moves to the right, the more aggressive DRS will work to balance the cluster.

These threshold values determines which recommendations will be generated when DRS senses an imbalance of cluster. The Conservative setting generates only priority-one recommendations, the next level to the right generates priority-two recommendations and higher, and so on, down to the Aggressive level which generates priority-five recommendations. The migration threshold can be breakdown as follows:

• Level 1 (Conservative) – apply only priority 1 recommendations. vCenter Server applies only recommendations that must be taken to satisfy cluster constraints like affinity rules and host maintenance.
• Level 2 – apply priority 1 and priority 2 recommendations. vCenter Server applies recommendations that promise a significant improvement to the cluster’s load balance.
• Level 3 – apply priority 1, priority 2, and priority 3 recommendations. vCenter Server applies recommendations that promise at least good improvement to the cluster’s load balance. This is the default value.
• Level 4 – apply priority 1, priority 2, priority 3, and priority 4 recommendations. vCenter Server applies recommendations that promise even a moderate improvement to the cluster’s load balance.
• Level 5 (Aggressive) – apply all recommendations. vCenter Server applies recommendations that promise even a slight improvement to the cluster’s load balance.

DRS performs a cost/benefit analysis to calculate a priority rating for each recommendation. The current demand of the VM is examined and DRS evaluates whether a migration would be worth the effort. There is a cost associated with every migration, and each vMotion adds an increased demand on CPU, memory, and network to the source and destination hosts. DRS calculates the performance improvement and weighs that with the cost of performing the migration. The more significant the benefit, the higher the priority rating.

A priority level for each migration recommendation is computed using the load imbalance metric of the cluster. This metric is displayed as Current host load standard deviation in the cluster’s Summary tab in the vSphere Web Client. A higher load imbalance leads to higher-priority migration recommendations.

For more information about this metric and how a recommendation priority level is calculated, see the VMware KB-1007485

After a recommendation receives a priority level, this level is compared to the migration threshold you set. If the priority level is less than or equal to the threshold setting, the recommendation is either applied (if the relevant virtual machines are in fully automated mode) or displayed to the user for confirmation (if in manual or partially automated mode.)

Matthew Meyer has explained in greater details about the DRS migration threshold on VMware Blogs. Matt has also explained in detail about migration threshold in his another blogpost