What Is a Hypervisor?
A hypervisor is software that lets one physical computer pretend to be several computers. Each pretend computer — a virtual machine, or VM — gets its own slice of CPU, memory, and disk, and runs its own operating system, unaware that it's sharing the hardware. To the VM, it looks like a complete PC with its own BIOS, its own hard drive, its own network card.
The mental model: your computer is an apartment building. The hypervisor is the building manager. Each VM is an apartment — separate front door, separate rooms, tenants who never meet. One tenant flooding their bathroom doesn't flood the neighbor's.
Type 1 vs type 2
Hypervisors come in two flavors:
| Type 1 (bare metal) | Type 2 (hosted) | |
|---|---|---|
| Runs on | The hardware directly | Inside another OS |
| Examples | Proxmox VE, VMware ESXi, Hyper-V | VirtualBox, VMware Workstation |
| Feels like | An appliance | An app |
A type 1 hypervisor is the operating system of the machine. You install Proxmox VE onto the bare computer the way you'd install Windows or Linux — and then it does nothing but run VMs. That's why it's efficient: there's no desktop, no browser, no overhead between your VMs and the hardware.
A type 2 hypervisor runs inside your normal OS. VirtualBox on your laptop is type 2: convenient for trying things, but your VMs compete with everything else your laptop is doing.
For a home server that runs 24/7, type 1 is the right shape. That's the job Proxmox VE was built for.
What Proxmox VE actually is
Proxmox Virtual Environment (VE) is a free, open-source type 1 hypervisor built on two mature Linux technologies:
- KVM for virtual machines — full virtualization, so guests can run Linux, Windows, BSD, anything.
- LXC for containers — lightweight, Linux-only, sharing the host's kernel (much more on this in Containers vs VMs).
Around those it wraps a web interface, storage management, backups, clustering, and a firewall — the whole datacenter toolkit, sized for anything from one old desktop to a rack of servers. The software is free and functionally complete without paying; the paid subscription buys support and access to the slower, more tested update repository. Your homelab does not need it.
Proxmox vs the alternatives, plainly
- vs VirtualBox: VirtualBox is for your laptop. Proxmox is for the box in the corner that never sleeps. Different jobs.
- vs VMware ESXi: ESXi is the commercial incumbent. Proxmox does the same core job — VMs, snapshots, clustering — open source and free. Many home labs migrated after VMware's licensing changes.
- vs Docker: Docker runs application containers; Proxmox runs machine containers (LXC) and full VMs. They overlap at the edges but answer different questions. Docker asks "how do I ship this app?"; Proxmox asks "how do I divide up this server?"
The one idea to keep
A hypervisor divides hardware into isolated machines. Proxmox VE is a free, open-source, type 1 hypervisor that manages that division — VMs and containers, storage, backups, networking — through a web page. Everything in this guide hangs off that one idea.