The ESXi system has two independent banks of memory, each of which stores a full system image, as a fail-safe for applying updates. When you upgrade the system, the new version is loaded into the inactive bank of memory, and the system is set to use the updated bank when it reboots. If any problem is detected during the boot process, the system automatically boots from the previously used bank of memory. You can also intervene manually at boot time to choose which image to use for that boot, so you can back out of an update if necessary.