For HA, DRS, vMotion and Storage vMotion to work you need to use shared storage, in this case an iSCSI SAN.

I will show you how to configure ESX to connect to and use iSCSI SAN storage with CHAP authentication.

See Configuring iSCSI Storage (Basic) if your not using CHAP.

1. Firstly you need to ensure you have a VMkernel Port.

If you do not have a "VMkernel Port" on a vSwitch on your ESX server you will need to Create a VMkernel Port.

By default the installation of ESX only creates a "Virtual Machine" and "Service Console" port group.

2. Now the storage adaptor needs configuring. This is a software iSCSI adaptor but the method is the same. (Note that using a software ISCSI adaptor adds an extra overhead to the server).

3. In the "Storage Adaptors" section click on the iSCSI adaptor (e.g. iSCSI Software Adaptor) you want to configure, then click "Properties".

4. Click "Configure" in the iSCSI initiator properties dialog.

5. In the status section tick "Enabled" and Click Ok.

6. The iSCSI initiator name and alias will be created and the status will show "enabled". Click Close.

7. Click "CHAP..." to begin configuring the CHAP authentication credentials.

8. Now we can enter CHAP authentication details.

Entering the details here on the iSCSI initiator makes it the default settings for all targets (it can also be entered per target if you have specific settings for each target).

Enter the CHAP username and secret for the target host.

You must created these on your iSCSI SAN storage prior to this (see Changing restricted access to a Volume on an EqualLogic PS as an example).

Click Ok.

9. When using send targets click on the "Dynamic Discovery" tab.

10. Click "Add". Enter the IP of the iSCSI server and the port for discovery.

11. Click Ok and then Close. 

12. You will be asked to rescan the host. Click Yes.

13. You will now see the iSCSI adaptor settings and any LUNs you have configured for this host on your SAN.

14. You can now use these as VMFS datastores (see Creating a VMFS Datastore) or an RDM (see Adding a raw device mapping (RDM) to a virtual machine).