It takes a lot of time to setup a server and then it must be maintained including regular backups. Virtualization can help with a lot of this. Modern computers have lots of cores, memory, and disk space so it is now possible to run multiple servers as virtual machines within a single physical server. This arrangement offers lots of advantages including:

• Use resources efficiently – many servers only use a small fraction of the physical machines capability so you can easily run quite a few virtual servers on one physical machine.
• Keeping servers and their environments separate helps avoid conflicts
• Easily perform “bare metal” backups of virtual servers and restore them to the same or a new physical server for quick disaster recovery.
• Easily allocate and expand resources (within the limits of the physical server)

I generally run my home servers on Intel NUC platforms because they offer a nice balance of computing power and power efficiency. A basic NUC 12 Pro with an i5-1240P or higher processor has at least 12 cores, up to 64GB of RAM, a fast NVMe gen 4 drive, 2.5GbE, and a TDP of only 28W. For bulk storage, you can use a NAS or connect a DAS via USB3.2 for very high speed. They stack, they’re small, quiet, and the low power consumption means a typical UPS will carry them through most outages. In short, they’re great little servers.

For virtualization, I like Proxmox. Proxmox is Debian based; it installs quickly from a USB flash drive and provides a friendly web-based management interface that is exactly what’s needed. It allows you to see the status and manage both the physical server and the VMs. It has a tightly integrated KVM hypervisor so you can access the console of each VM and the physical server remotely via the web interface.

Proxmox also makes it easy to make “bare-metal” backups which take a snapshot of the entire VM that can be easily restored in case of disaster either on the same physical server or a new server. The backup files are sparse and compressed; a machine with 64GB of storage that is using 24GB will yield a snapshot file ~12.5GB. You can download the snapshots and store them on bulk storage and off-site. The fact that Proxmox is so easy to install and that you can then restore entire VM snapshots quickly means that even if the physical server and/or storage failed completely, you can be back up and running on a new machine in less than 30 minutes. (I have done this)

Many servers don’t need a lot of compute power; most of mine do just fine with 4-8GB of RAM 2-4 cores, and 32-64GB of storage. This means I can host several servers on a NUC12 without it breaking a sweat. Keeping servers separate (e.g. database, middleware, web applications, etc.) makes it easy to scale and to upgrade individual servers without software or hardware conflict with others.

Update Sept 2024:
I have been using Proxmox for a few months now and still like it a lot; it simply works. The web-based management is perfect – exactly what’s needed for managing VMs with excellent status-at-a-glance and detailed configuration pages. I have resized VM hardware allocations on the fly several times and the interface is fast and intuitive. The bare-virtual-metal backups are easy to do and give me confidence about disaster recovery.

The only thing I think proxmox should change is their lowest tier (community) pricing/model:

• I hate renting software; if they simply charged a fixed price with optional annual maintenance, most serious users (including me) would likely end up buying the maintenance anyway since nobody wants to run a server without the latest security fixes. However, I don’t want that decision forced on me; I like to own not rent.
  
• The per-socket pricing effectively forces certain hardware choices: in particular, a single high-power server over a few low-power machines (like NUCs) that have been re-purposed. This removes a certain level of flexibility (the opposite of everything else about proxmox). For the community model, a site-license that covered a small number of machines or some aggregate level of computing power might make more sense.
  
• Finally, $110/year/socket is well above the no-brainer cost for most users. I’d bet proxmox would net significantly more revenue if they lowered their community pricing to the ubiquitous $99 purchase + $49/year optional maintenance.