We've had this debate at my workplace. My view is that defrag utilities from Microsoft & others that run from within Windows assume they are viewing physical disks. But they are not. There's no relation to what the defrag software sees as the file allocation on the logical disks and the actual layout on the physical disks. So running a defrag operation on virtual disk hosted on a SAN is just going to generate a bunch of unneeded I/O and is just as likely to increase read/write times as it is to decrease them.