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PVSCSI adapters are high-performance storage adapters that can provide greater throughput and lower CPU utilization. PVSCSI adapters are best for environments, especially SAN environments, where hardware or applications drive a very high amount of I/O throughput (as with databases). PVSCSI adapters are not suitable for direct attached storage (DAS) environments.
VMware's preconfigured VM templates don't always use the storage controllers that have the best performance. The reason is that Windows 2016 does not come with the corresponding drivers. The result is that it is impossible to install a new VM running Windows Server 2016 out of the box.
There are two ways you might want to proceed depending on whether you have already deployed some Windows 2016 VMs or you're building a new VM from scratch.
Case 1: Change from LSI Logic SAS to VMware Paravirtual SCSI on a Windows Server 2016 VM
I assume you have a traditional VM with a single virtual disk configured. You'll need to proceed outside of business hours, as the steps require rebooting the VM several times.
First, add a new storage controller to your VM and change the type to VMware Paravirtual.
Then add a small 2 GB hard disk and attach it to SCSI controller 1 (make sure to select SCSI 1:0 as the connection). This disk is not a system disk, so the VM will boot normally, and the Windows operating system will automatically find the drivers it can use to install this VMware Paravirtual controller.
After the OS finds drivers for the disk, make sure the disk appears in the Disk Management console, so you can initialize, format the disk, and bring it online.
Once done, gracefully shut down the VM and change the first SCSI controller 0 to VMware Paravirtual, and then click the Change type button.
You can boot the VM, as the OS is now aware that some of its controllers are using VMware Paravirtual, thus it can boot successfully. The OS already installed the drivers with the previous step.
As mentioned before, this was for the case in which you have already some VMs (including Windows Server 2008 R2 or Server 2012 R2 VMs) up and running, and you just want to change the controller type for those VMs.
If you create a new VM, you can do it as described below.
Case 2: Prepare a new VM with VMware Paravirtual for a boot disk
You can download the latest VMware tools from VMware, or you can use the one bundled with your ESXi installation within the Locker directory. The corresponding ISO image files are located at /locker/packages/.
You can get the latest ISO (Windows.iso) from VMware's website.
During the installation process when the Windows Server installer asks you where you want to install (and you don't see any volumes), just click the Load driver link.
Make sure you previously mounted the "Windows.iso" you downloaded from VMware, as a second CD/DVD to your VM.
Then browse the ISO and locate the driver.
The driver path will display within the setup window. Click Next to load the driver.
After that, a new unallocated space shows up.
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I described two ways to set up a Windows Server 2016 VM with a VMware Paravirtual SCSI. The two main benefits are the increased throughput and lower CPU usage.