To do so, log onto the service console of the ESX Server as the root user. Then do:
mkdir /var/updates

Using a utility like Veeam FastSCP, copy all downloaded patches to the newly created directory on the ESX Server.

One all the patches have been copied to the ESX Server, log on to the service console of the ESX Server as the root user.

Browse to the directory where the patches reside:
cd /var/updates

Now we need to unzip all the .ZIP files. Now, there should be quite a few files, so it would be painful to unzip them one-by-one, so we are going to use a "for" loop to do the trick for us.

To unzip all the .ZIP files in one go, execute the following command. MAKE SURE YOU ARE IN THE DIRECTORY WHERE THE ZIP FILES RESIDE! ALSO MAKE SURE TO TYPE THE COMMAND EXACTLY AS BELOW, EVEN WITH THE x_file!
for x_file in *.zip; do unzip $x_file; done

This command will unzip all the zip files, each in its own directory, except for contents.zip, which will be unziped into the directory where the command was executed from. In this case /var/updates.

Now, in order to perform patching operations on an ESX Server, the server needs to be in "Maintenance Mode". This means that all Virtual Machines on the server will have to be powered off.

Make sure all Virtual Machines are powered off, then place the ESX Server in Maintenance Mode. You can do this using the Virtual Infrastructure Client or by simply executing the following command from the service console: (Must be run as the root user. Note that as far as I'm aware, this command is not supported by VMware Support but does work perfectly well):
vimsh -n -e /hostsvc/maintenance_mode_enter

Once the ESX Server is in Maintenance Mode, we can start esxupdate and apply the patches:
cd /var/updates
esxupdate -d /var/updates/ scan
esxupdate -d /var/updates/ update

After the patches are applied to the server, the server will reboot. To exit Maintenance mode, run the following command:
vimsh -n -e /hostsvc/maintenance_mode_exit

** This is only a basic guide to patching an ESX Server from the service Console using a local patch repository with esxupdate. For more information on ESXUPDATE and patch management, refer to the VMware ESX Server 3 Patch Management Guide available here

**Please report any error in this document here