Virtualisation management: should Vcenter, Veeam etc be on a physical machine or VM?

Solution 1:

VMware best practice now is to install vCenter on a VM with HA. That's from a VMware training class when 5 originally came out. HA doesn't require vCenter to actually be working once set up, as the hosts know what to do.

I have Essentials Plus, use this setup, and can attest that it works well for us. Just make sure that you have enough capacity on your hosts to accommodate HA.

Solution 2:

We have over 100 separate vCenters and every one of them is a VM, it means we get all the usual virtualisation benefits and because we run them on a specific management cluster in the event of one crashing or whatever we can just connect directly to the host they're running on and restart or whatever as needed. We're something like the 4th or 5th biggest VMWare customer and we wouldn't consider using a physical for this, especially a bottom-end box like you've suggested.