Update Manager enables centralized, automated patch and version management for VMware vSphere and offers support for VMware ESXi hosts, virtual machines, and virtual appliances.
With Update Manager, you can perform the following tasks:
Upgrade and patch ESXi hosts.
Install and update third-party software on hosts.
Upgrade virtual machine hardware, VMware Tools, and virtual appliances.
Update Manager requires network connectivity with VMware vCenter Server. Each installation of Update Manager must be associated (registered) with a single vCenter Server instance.
The Update Manager module consists of a server component and of a client component.
You can use Update Manager with either vCenter Server that runs on Windows or with the vCenter Server Appliance.
If you want to use Update Manager with vCenter Server, you have to perform Update Manager installation on a Windows machine. You can install the Update Manager server component either on the same Windows server where the vCenter Server is installed or on a separate machine. To install Update Manager, you must have Windows administrator credentials for the computer on which you install Update Manager.
If your vCenter Server system is connected to other vCenter Server systems by a common vCenter Single Sign-On domain, and you want to use Update Manager for each vCenter Server system, you must install and register Update Manager instances with each vCenter Server system. You can use an Update Manager instance only with the vCenter Server system with which it is registered.
The vCenter Server Appliance delivers Update Manager as an optional service. Update Manager is bundled in the vCenter Server Appliance.
In vSphere 6.5, it is no longer supported to register Update Manager to a vCenter Server Appliance during installation of the Update Manager server on a Windows machine.
The Update Manager client component is a plug-in that runs on the vSphere Web Client. The Update Manager client component is automatically enabled after installation of the Update Manager server component on Windows, and after deployment of the vCenter Server Appliance.
You can deploy Update Manager in a secured network without Internet access. In such a case, you can use the VMware vSphere Update Manager Download Service (UMDS) to download update metadata and update binaries.
Refer VMware Page for More
Check the POST to learn How to Install and Configure Update Manager on Windows vCenter 6.5