Many beginner admins have a problem with upgrading ESXi5 free or standalone servers. In general, there are 3 ways:

  1. Upgrade using ISO
  2. Upgrade using PowerCLi
  3. Upgrade using ESXi command line

I will quickly describe how to upgrade or patch ESXi5 free or standalone server using ESXi command line.

  1. Download zip ( update-from-esxi5.0-5.0_update01.zip ) upgrade package from VMware site
  2. Upload zip to ESXi server or to datastore which ESXi has access to.
  3. Verify ESXi version before upgrade:

    vmware -v command output

  4. Shutdown all Virtual machines before upgrade.
  5. Put ESXi server into maintenance mode
     vim-cmd hostsvc/maintenance_mode_enter
  6. Execute below command
     ~ # esxcli software vib install -d /path/to/update-from-esxi5.0-5.0_update01.zip
  7. After a minute below info message will appear on screen
     Installation Result
     Message: The update completed successfully, but the system needs to be rebooted for the changes to be effective.
  8. Reboot ESXi server
  9. Exit server from maintenance mode
  10. Verify ESXi build after restart.

    ESXi build number after upgrade

  11. Host  upgraded, now, you can start VMs and upgrade VMware tools on it.

If you would like to use different method, see below link to  VMware kb article.