What does the term 'fault tolerance' refer to in VMware vSphere?

The term 'fault tolerance' in VMware vSphere refers to continuous availability through a shadow instance. This feature allows virtual machines (VMs) to run in a fault-tolerant mode, which means that a secondary instance of the VM, known as the shadow instance, is maintained and synchronized with the primary VM in real-time. If the primary VM fails for any reason, the secondary instance can take over almost instantly, ensuring that there is minimal disruption to services. This capability is critical for environments that require high availability, as it protects against hardware or software failures without the need for manual intervention or downtime.

In the context of other options, providing additional CPU power to VMs pertains to resource allocation rather than fault tolerance; creating VM backups deals with data recovery rather than real-time availability; and limiting the number of VMs per host relates to resource management and performance considerations, which do not directly address the concept of fault tolerance.