Extend the Hard disk 

Increasing the disk space on the selected drives involves two steps

1)       Size of the virtual disk  has to be increased first and then

2)       Size of a disk partition has to be increased

In ESX 4.1, We can extend virtual disks to a virtual machine when it is powered on (after installing VMware Tools).

Caution: VMware recommends that we have to back up  virtual machine before increasing the size of virtual disks.

Confirm all the snapshots have been removed before increasing the size of the virtual disk:

Steps for increasing the size of a virtual disk

1.      Select the virtual machine from the Inventory.

2.      Click Edit Virtual Machine Settings.

3.      Select the Hard Disk you want to increase the disk space.

Increasing the size of a disk partition

 We can use any third-party utility to resize the disk partitions which we are familiar with.

Windows Server 2008, Windows Server 2008 R2,  can expand the volumes from the Disk Manager in Computer Management. Right-click on volume and click Extend Volume.

Increasing the volume using Extpart utility

1) Extract the tool from the archive.

2) Open the command prompt and go to the directory where you have extracted ExtPart.exe

When you run the tool without any parameters, you'll be asked with the following questions:

Volume to extend (drive letter or mount point):
usually C:

Size to expand the volume (MB):
This is the size (in MB!!) you added to the VM Hard Disk. Eg 5GB -> 5000MB.

This is all  for adding the empty space.

Sometimes reboot of the VM may required.

Note :-

Acronis disk director is best tool for increasing the disk partitions but it is licensed software and requires reboot of the VM.