Drive containing Exchange 2010 logs is 86% fragmented: can I run Windows Defrag?

Nothing stopping you defragmenting the VMware vSphere virtual machine C: drive.

Should you is the question, I would not bother, it will not cause you any issues.

So no to defrag.

see here to support my Answer.

https://blogs.vmware.com/vsphere/2011/09/should-i-defrag-my-guest-os.html

Thank you but this does not address the questions at all.

Solution accepted is indeed Grade B as per published EE guidelines.

"B is the grade given for acceptable solutions, or a link to an acceptable solution. A B grade means the solution given lacked some information or required you to do a good amount of extra work to resolve the problem."

The question was simply worded but the Expert did not initially answer it.
When follow up was posted the answer that came back still did not clearly answer the post and was confusing. I subsequently had to research some more and escalated accordingly.

The answer to the questions was actually rather simple:
"Yes you can do that. You need to shutdown the databases before you do it. "

Regards.

Andrew's answer is what I would have told you as well. Fragmentation, as  seen by the OS, in a VM situation, is not a problem that requires a remedy. The link Andrew provided offers several reasons why defragging a virtual disk would be counterproductive.

Whoever told you to shut down Exchange while defragging gave you incomplete advice. In normal operation, log files are written once, read only in background for backup and replication, so rearranging their position on the disk cannot have any benefit.