VMware vSphere is a suite of virtualization applications that includes ESX and vCenter Server.

vSphere uses virtualization to do the following tasks:

Run multiple operating systems on a single physical machine simultaneously.

Reclaim idle resources and balance workloads across multiple physical machines.

Work around hardware failures and scheduled maintenance.

vSphere includes the following components in addition to the ESX host and vSphere Client you have already setup:

VMware vCenter Server

vCenter Server unifies resources from individual hosts so that those resources can be shared among virtual machines in the entire datacenter. It accomplishes this by managing the assignment of virtual machines to the hosts and the assignment of resources to the virtual machines within a given host based on the policies that the system administrator sets.

vCenter Server allows the use of advanced vSphere features such as VMware Distributed Resource Scheduler (DRS), VMware High Availability (HA), and VMware VMotion.

Datacenter

A datacenter is a structure under which you add hosts and their associated virtual machines to the inventory.

Virtual Machine

A virtual machine is a software computer that, like a physical computer, runs an operating system and applications. Multiple virtual machines can run on the same host at the same time. Virtual machines that vCenter Server manages can also run on a cluster of hosts.

vSphere Components shows the relationships among the basic components of vSphere and how vCenter Server can be used to manage hosts and run virtual machines.

vSphere Components
Two hosts and a cluster with virtual machines connected to a vCenter Server accessed by a vSphere Client