tl;dr: Proxmox or bare metal? Containers yes/no? What is your use case?
I used a Dell R710 when I first started self-hosting, it ran ESXi with one VM for each service I wanted. Restarting the server required me to first shutdown each VM in order and then the whole host. When setting up a new service to host I had to create a new VM (allocate RAM, disk etc), install the OS (I ran Debian) and then follow instructions for how to setup the service. This mostly was not a problem but one software I never managed to get working was Apache Guacamole.
Nowadays I have a Dell Optiplex I salvaged for parts, got a new case and all my HDDs from my R710. Because it has much less RAM and an old Intel i5 (6th or 7th generation), I decided to get into Docker. With Docker containers you write your compose file and it will just work. No more need to dig through documentation for which version of a dependency to use, how to handle if two services on the same host need different versions (this was part of the reason for one VM/service). With Docker, I can try out a software in seconds and have it configured to my liking in minutes.
Today I have NixOS (bare metal) and it comes with Podman which uses systemd. Hence restarting my OS (albeit not that often, almost never unless I mess up my config) is a no-brainer because Podman via systemd will manage everything. Adding, stopping or removing containers in general is easy. I have a script running as a service which will stop a container, create a BTRFS subvolume snapshot, start the service again and start borg backup to backup from the snapshot.
For me using Proxmox would just an extra layer of complexity I don't need. I only have one server and I am the only user.
Questions:
- Do you use Proxmox instead of a bare metal installation?
- Do you use containers or do you install manually?
- What is you use case that requires your setup the way it is?
You should be using them depending on your needs. There's a difference between app containers (single app per container), system containers (multiple apps in the same container) and VMs (OS + whatever, virtualized rather than containerized).
You probably need app containers most of the time so docker or podman is a good fit. But sometimes you might feel more confortable with another level of abstraction. Tools like Proxmox or Incus make it easy to manage "system"-level abstractions like system containers (with LXC) or VMs (with KVM) and give you a unified management approach.
You don't have to give up app containers either. You can run docker or podman inside an LXC system container and have the best of both worlds.
Deciding when to take advantage of the system abstraction is the hard part. A simple rule of thumb is to do it when you'd like to manage the "machine" that holds the stack in a way that's different from the host. Maybe you want to run a different Linux distro; maybe it's the same distro as the host but you want to organize it differently; maybe you need to run a non-Linux OS.