Architecting a vRealize Log Insight Solution : Understanding vSphere Logs : 2.3 Log Rotation
   
2.3 Log Rotation
Rotation refers to the turnover of auto-numbered log files. For example, if you set the maximum number of log files to 10, after the 10th log file is written, the numbering sequence is reset to zero and the first of 10 log files is overwritten with the most current log entries.
The default setting for ESXi 5.x was to rotate 10 files with a size of 5120 KB each, whereas the default for ESXi 5.1.x, 5.5.x and 6.x is to rotate 10 files with a size of 10240 KB each. Log rotation relates only to the hosts’ locally-stored log files, and is designed to prevent the size of log files from getting overly large. Log rotation does not affect remote syslog server log message retention. Rotated logs are compressed at the persistent file location /var/run/log/.
For more information on log rotation and modifying logging levels, see Increasing VMware vCenter Server and VMware ESX®/ESXi logging levels (1004795) at http://kb.vmware.com/kb/1004795.