When you decide to build a homelab around virtualisation, the first real decision you face is which hypervisor to run. It sounds like a technical detail but it shapes everything that comes after — how you manage VMs, how you access the interface, what features you get for free, and how much you’ll be fighting the platform instead of learning from it.

I evaluated three options seriously: VMware ESXi, Microsoft Hyper-V, and Proxmox VE.

I chose Proxmox. Here’s why.

What is a hypervisor?

A hypervisor is the software layer that sits between your physical hardware and your virtual machines. It allocates CPU, RAM, storage and networking resources to each VM, keeps them isolated from each other, and lets you run multiple operating systems on a single physical machine simultaneously.

There are two types:

  • Type 1 (bare metal) — runs directly on the hardware, no host OS underneath. ESXi, Proxmox, and Hyper-V (as a role on Windows Server) all fall here.
  • Type 2 (hosted) — runs on top of an existing OS. VirtualBox and VMware Workstation are examples. Fine for desktop use, not for a homelab server.

For a homelab you want Type 1. The question is which one.

VMware ESXi

ESXi was for a long time the gold standard for homelab virtualisation. It’s what runs in enterprise data centres, it has excellent documentation, and the community knowledge base is enormous.

The problem is licensing.

VMware was acquired by Broadcom in 2023, and the licensing model changed dramatically. The free ESXi tier — which homelabbers had relied on for years — was discontinued. What was once free now requires a subscription that makes no sense for a home environment.

For professional development or a lab that mirrors a real enterprise environment, ESXi still makes sense. For a personal homelab where cost matters, it’s hard to justify.

Microsoft Hyper-V

Hyper-V is Microsoft’s hypervisor, built into Windows Server and available as a standalone role. If you’re already running Windows Server for other reasons, it’s a reasonable choice — it’s well integrated, familiar to anyone with a Windows background, and the tooling is solid.

The downsides for a homelab context:

  • You need a Windows Server license, which isn’t free
  • The management interface (Hyper-V Manager or Windows Admin Center) is more complex than it needs to be for a simple setup
  • Linux VM support has improved significantly but Windows-centric tooling still shows

If your day job is heavily Microsoft-focused and you want to practice in a familiar environment, Hyper-V is worth considering. For a general purpose homelab, it adds unnecessary friction.

Proxmox VE

Proxmox Virtual Environment is a free, open-source hypervisor based on Debian Linux and KVM. It combines full VM support (via KVM) with lightweight container support (via LXC) in a single platform, managed through a clean web interface.

It’s what I run, and it’s what most serious homelabbers run.

Here’s why it wins for a homelab context:

It’s completely free. There’s a paid subscription tier for enterprise support and access to the stable update repository, but everything works perfectly on the free tier. You can add the community repository and get updates without paying anything. For a homelab, the free tier is all you need.

The web interface is excellent. You get a full, capable management interface in your browser — create VMs, manage storage, monitor resources, configure networking, take snapshots. All without installing any additional management software.

LXC containers are a game changer. Unlike ESXi which only does full VMs, Proxmox lets you run LXC containers alongside VMs. Containers share the host kernel, use a fraction of the RAM a full VM would need, and start in seconds. For lightweight services like a DNS resolver, a documentation server, or a monitoring tool, an LXC container is far more efficient than a full VM.

The community is massive. Proxmox has one of the most active homelab communities around. Whatever you’re trying to do, someone has done it and written about it. The official forums, Reddit, and YouTube are full of guides and walkthroughs.

It runs on almost anything. Old enterprise servers, mini PCs, repurposed desktops — Proxmox installs cleanly on almost any x86 hardware. My HP DL380 G6 runs it without a single issue despite being a 2009 machine.

The one downside worth mentioning

Proxmox has a subscription nag — a popup in the web interface reminding you to subscribe. It’s cosmetic and doesn’t limit functionality, but it exists. You can remove it with a one-line script that’s widely documented in the community.

It’s a minor annoyance, not a dealbreaker.

My verdict

For a homelab in 2026, Proxmox is the clear choice:

  • Free and fully featured
  • Excellent web interface
  • VMs and containers in one platform
  • Huge community
  • Runs on virtually any hardware

ESXi made sense when it was free. Hyper-V makes sense in a Windows-heavy environment. For everything else — Proxmox.

Next up: Installing Proxmox from scratch — a step by step guide.