Hey 
 

Based on the BP Veeam.
We recommend using On-Host backup proxies unless there are dire reasons to not use them. The pros of On-Host proxies do outweigh the cons a lot.

Every Hyper-V server added to Veeam Backup & Replication will be installed with the Veeam On-Host proxy role automatically.

 

Source
https://bp.veeam.com/vbr/2_Design_Structures/D_Veeam_Components/D_backup_proxies/hyperv_proxies.html

Hi ​@MavMikeVBR ,

i normally  go for onhost Proxy because this is the least complex way to use and maintain and i think that you will get a Higher Performance when every HyperV Host in the Cluster is a Proxy compared to using only one dedicated Host. 

Regards 

Chalid

As an alternative: In case of a 3-tier architecture you could also go with off-host proxy since you can be able to keep backup workloads and traffic away from your Hyper-V hosts. But implementing is way more complex and not possible in every scenario.