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In-place upgrade of the guest operating system (between major OS release versions, such as Windows 10, version 2004 or later to Windows 11) is not recommended. The best practice is to install a new major OS releases in a new VM.
Support considerations: Read OS vendor's documentation to ensure the specific upgrade scenario is supported. If the OS vendor does not support a particular upgrade scenario, then VMware will not be able to provide support for such scenarios due to lack of ability to collaborate with the OS vendor.In-place upgrade is a feature of the operating system, if problems are encountered, it is best to first contact the OS vendor for assistance. If the OS vendor has narrowed down problem to be specific to VMware software, then VMware can provide assistance.Some VMware products do not support in-place upgrade of the guest operating system in a VM. For more details, see VMware support for guest operating system upgrade (2018695).Check VMware Compatibility Guide to ensure new operating system version is supported as guest on the VMware product.Check the configuration of VM to ensure that it meets requirements to run new OS release. New major OS releases sometime increase the minimum require amount of memory, video ram, disk space, etc. In addition, performing OS upgrade consumes disk space, so ensure VM has adequate storage to complete the upgrade. It may be necessary to power off the VM to make some of these adjustments before starting the upgrade.For all applications running in the OS, contact the application vendor to determine their support policies and guidance for conducting operating system upgrades.
Before guest OS upgrade, upgrading VMware tools to the latest version available for current Windows release, test installation on a cloned VM firstly, taking snapshot of the VM or saving backup of the VM are recommended. In Windows 10 guest OS, download and run PC Health Check app (https://www.microsoft.com/windows/windows-11#pchealthcheck) to check if your virtual machine meets the minimum system requirements. Change virtual machine virtual hardware configurations according to the result of PC Health Check when needed. Note: do not change the firmware from BIOS to EFI, or the guest OS will not boot up. For adding vTPM device to an existing virtual machine, please refer to this VMware doc: https://docs.vmware.com/en/VMware-vSphere/7.0/com.vmware.vsphere.security.doc/GUID-4DBF65A4-4BA0-4667-9725-AE9F047DE00A.html If you have a Windows 11 ISO image used for Windows 11 installation, follow the resolution given below, Mount this ISO file to the VM, select “Virtual Machine -> Edit Settings -> CD/DVD drive -> Datastore ISO file”, click “Browse” to select the Windows 11 ISO file from datastore as CD/DVD media. Logon to the guest OS and double-click CD-ROM from the File Explorer. Follow the installation prompts to complete the installation. Upgrade or reinstall VMware tools after OS upgrade is done. Shutdown VM, select “Virtual Machine -> Edit Settings -> VM Options -> General Options”, change “Guest OS Version” to “Microsoft Windows 11 (64-bit)” on vSphere 8.0. For Windows 11 guest operating system option see this KB85665 . For other methods please refer to Microsoft doc: Ways to install Windows 11
Known issue:Guest OS in-place upgrade to Windows Server 2022 or Windows 11 failed after upgrading VMware Tools to 12.0.5 or later on vSphere (https://kb.vmware.com/s/article/89290)