VMware will install the operating system from the ISO file onto the virtual machine.
Select the 'Installer Disc Image File (ISO)' option in the New Virtual Machine Wizard and browse to the ISO file.You can also specify the new disk size in kilobytes or megabytes by using 'K' or 'M' instead. Type 'vmkfstools, followed by the virtual disk filename, then –X, and finally place the new disk size you want to implement followed by a G. Switch to the VM's working directory where the disk file is located.