Choosing a hypervisor used to be straightforward. VMware was the enterprise standard, Hyper-V was the Microsoft default, and Proxmox was the scrappy open-source option for home labs. That calculus changed dramatically in 2023 when Broadcom completed its £61 billion acquisition of VMware and promptly restructured licensing in a way that left thousands of small and mid-sized businesses facing bills they could not justify. Perpetual licences were withdrawn, partner programmes were dissolved, and annual subscription costs for smaller organisations rose by triple-digit percentages almost overnight. The result has been a mass reassessment — and for many UK businesses, the alternatives are looking more attractive than ever. Here is how the three main contenders compare in 2024.
Proxmox VE
Proxmox Virtual Environment is a free, open-source hypervisor built on Debian Linux, combining KVM virtualisation for virtual machines and LXC for lightweight containers. The core platform costs nothing to download and run — including in production. The only paid offering is an enterprise subscription that provides access to stable enterprise repositories and professional support, starting at roughly €110 per CPU per year. For most home labs and smaller businesses, the free tier with community repositories is entirely adequate.
Setup is straightforward: download the ISO, boot from USB, answer a handful of questions, and you have a working hypervisor in under ten minutes. The web-based management interface is modern, responsive, and does not require any additional software beyond a browser. From a single pane of glass you can create and manage VMs, configure storage (local disk, NFS, Ceph, ZFS), set up clustering across multiple nodes, manage networking, and schedule backups — all without touching the command line unless you want to. Proxmox has strong hardware compatibility because it inherits the broad Linux driver ecosystem, making it a reliable choice on commodity servers and even recycled desktop hardware.
The community ecosystem has grown significantly, particularly since the VMware exodus began. The Proxmox forums are active and well-moderated, documentation is thorough, and there is a growing body of UK-specific tutorials and community knowledge. For businesses that do not require a vendor-backed SLA, the community support is genuinely excellent. The main limitation is that enterprise support options, whilst available, do not match VMware or Microsoft for breadth of professional services or the reassurance of a large global support organisation.
Best for: Home labs, UK SMBs migrating away from VMware, self-hosters, and any organisation comfortable managing infrastructure internally.
VMware ESXi (now Broadcom)
VMware ESXi is a bare-metal hypervisor that has underpinned enterprise virtualisation for more than two decades. Its technical credentials remain strong: it is mature, stable, extremely well-documented, and deeply integrated into enterprise tooling — vCenter for centralised management, vSAN for hyper-converged storage, NSX for software-defined networking, and tight connections to public cloud platforms.
The problem is cost. Following the Broadcom acquisition, VMware moved entirely to subscription-only licensing bundled into two packages: VMware Cloud Foundation and VMware vSphere Foundation. The free ESXi hypervisor licence was discontinued. For a small business that previously ran a handful of hosts on perpetual licences, the new subscription model can represent a tenfold increase in annual spend. Many UK partners and resellers have reported customers abandoning VMware entirely after renewal quotes arrived. Broadcom’s stated focus is on its largest customers, and the messaging has made little attempt to retain the SMB segment.
Setup and management remain world-class at enterprise scale. The vCenter interface is comprehensive, and for organisations already deeply invested in the VMware ecosystem — with trained staff, third-party backup integrations, and established runbooks — switching platforms carries real operational cost. Enterprise support is thorough, with global coverage and SLA options that genuinely matter in regulated or mission-critical environments. Hardware compatibility is excellent for certified server hardware, though the free ESXi’s removal has also complicated home lab and edge use cases.
Best for: Large enterprises already deeply embedded in the VMware ecosystem where switching costs outweigh the licensing increase, and organisations requiring vendor-backed support at global scale.
Microsoft Hyper-V
Hyper-V is Microsoft’s hypervisor, included at no additional cost with Windows Server (Standard and Datacenter editions). It is also available as a free standalone product — Hyper-V Server — though that variant has been discontinued for new downloads as of Windows Server 2019. For businesses already paying for Windows Server licences, Hyper-V represents a zero-incremental-cost virtualisation platform, which is its most compelling argument.
The setup experience is more involved than Proxmox. Configuring Hyper-V on Windows Server requires familiarity with Windows Server roles, and management is typically done through Hyper-V Manager (a local MMC snap-in), Windows Admin Centre (WAC, Microsoft’s browser-based management tool), or System Centre Virtual Machine Manager (SCVMM) for larger deployments. Windows Admin Centre is free and has improved considerably, but the overall management experience is less polished and more fragmented than Proxmox’s single coherent web interface. For administrators who live in the Windows ecosystem, this is second nature; for those coming from Linux-centric environments, the learning curve is steeper.
Where Hyper-V genuinely shines is Microsoft integration. If your workloads are predominantly Windows Server, Active Directory, Azure Arc, or Azure Stack HCI, Hyper-V is the natural fit. Azure Hybrid Benefit and Azure Arc integration are native, making it straightforward to build hybrid on-premises and cloud architectures. Hardware compatibility is solid on certified Windows Server hardware, though it does not match the breadth of the Linux ecosystem. Microsoft’s enterprise support through premier agreements and Software Assurance is well-established, and there is a large professional community of Windows Server administrators in the UK.
The weaknesses are the lack of native container support comparable to Proxmox’s LXC integration, a management interface that can feel pieced together compared to the competition, and the fact that you are still paying for underlying Windows Server licences to unlock the full feature set.
Best for: Organisations with existing Windows Server licensing, Microsoft-heavy workloads, or a roadmap that includes significant Azure or hybrid cloud investment.
Summary and Recommendation
For the majority of UK small and medium-sized businesses evaluating hypervisors in 2024, Proxmox is the clear recommendation. It is free, actively developed, has a strong and growing community, and the management interface is genuinely one of the best in class. The technical gap between Proxmox and VMware has narrowed considerably, and for most workloads the difference is imperceptible. Migrating from VMware to Proxmox carries a one-time effort, but it eliminates an ongoing and increasingly unpredictable licensing liability.
Hyper-V makes sense where there is already a significant Windows Server investment and the workloads are predominantly Microsoft-stack. It is a capable platform, but the management tooling requires more effort, and it is difficult to recommend to organisations without existing Windows expertise or licensing commitments.
VMware remains technically excellent, and at genuine enterprise scale — with thousands of VMs, a large virtualisation team, and deep ecosystem integrations — the switching cost may well exceed the licensing cost increase. For everyone else, Broadcom’s post-acquisition strategy has made the decision considerably easier. The platform that was once the undisputed default is now, for most UK businesses, the hardest to justify.
