There are different reasons to run different things. Some apps are not able to be run as containers, or don’t make sense to run containerized.

VMs offer better isolation between systems, which is important for high-security applications.

Traditional Hypervisors also allow you to easily run fleets of completely different OSes on the same hardware, which you can’t do with containers.

On the other hand, if you want/need high scalability, extremely efficient resource usage, and you don’t need to run radically different OS environments simultaneously, containers, especially Docker containers or Podman containers are a great choice.

Incus containers are a great middle ground that I’m a fan of more than Docker/podman containers or traditional VMs. They are system containers, vs application containers like Docker/Podman.

That means they are actually full-fledged Linux distros by default, but are still much smaller than a traditional VM.

Also, for any of these solutions, if you’re constantly doing admin tasks manually, you’re doing it wrong. All modern platforms have APIs or other ways to interact with them via code.

For my own setup, I have everything. My main server runs XCP-ng for the hypervisor, and I have several traditional VMs on it, including my primary NAS. I also run a virtual Incus host that I have my Minecraft server running in, and some random other system containers. I have a Docker host VM, but I don’t really use it.

I also have my home media server which is a standalone system running TrueNAS on bare metal with Tailscale and Jellyfin running as Docker containers within TrueNAS.

My setup is messy because it has been built slowly over several years, and I don’t have enough time or energy to rip it all down and put it back together in a more optimal way.