Proxmox for Managed Service Providers

Most Australian MSPs we work with do some mix of three things: run a hosted platform that their customers' workloads live on, design and deliver private platforms that the customer owns and operates themselves, and stand up small Proxmox deployments at SMB and branch-office sites. All three jobs got harder under Broadcom's VMware pricing. Proxmox is the practical answer to all three.

The three jobs MSPs actually do

1. Managed hosted platforms

Customer workloads running on the MSP's hardware, in the MSP's racks (or in colo), managed end-to-end. Customers don't see the hypervisor; they see "their VMs". Multi-customer but not necessarily self-service — onboarding, change requests, and capacity are handled by the MSP's engineering team. Proxmox VE gives you Ceph for shared storage, native backup via PBS, and HA without per-customer licence multipliers.

2. Private platforms for the customer

Customer-owned hardware in the customer's site (or their colo), designed and built by you, operated by you under a managed services contract. The customer wants a private cloud without becoming a virtualisation team. You deliver the platform plus the monitoring, patching, backup verification, and incident response that wraps around it. Proxmox keeps the licensing cost boring so the conversation stays on outcomes, not renewals.

3. SMB and office deployments

Smaller installs at SMB head offices, branch sites, retail locations, manufacturing floors — typically 2–4 nodes of commodity hardware, a handful of VMs, file/print/AD/POS workloads. VMware's licensing minimums make these sites economically unworkable now. Proxmox's per-socket pricing scales down cleanly, and PBS gives you tested backups without an extra vendor.

What changed with Broadcom

• Per-core licensing with minimums — 16-core/socket and 72-core/order floors hit small per-customer sites disproportionately. A 4-core branch-office host bills as 16, and any order bills at least 72 cores even if your customer has 16.
• VCSP terminated — the per-VM/usage-billed model for service providers ended in 2024. Replaced by commercial subscriptions priced for enterprise IT, not for businesses that sell infrastructure as a service. (If you're moving from hosting into self-service IaaS, see our CSP page — that's a separate evolution with its own playbook.)
• Suite uplifts forced — VCF bundles vSphere, vSAN, NSX, Aria, and VKS (vSphere Kubernetes Service, formerly Tanzu) under one per-core subscription. You pay for the whole stack whether your customers use it or not.
• Mid-cycle price moves — list per-core went from US$350 to US$400 partway through what was effectively a forced migration window. There's no honest argument that pricing has stabilised.

What an MSP needs from a platform

• Per-environment cost predictability. Whether it's a 3-node cluster at a head office or a 12-node hosted platform, the bill scales with hardware, not with how many VMs you run.
• Operational consistency across sites. Same tooling, same patching workflow, same backup verification process whether you're managing 3 sites or 30.
• Reliable backup with proof of recovery. Customers ask for evidence; PBS gives you per-customer verified restores without an extra backup vendor.
• Hardware freedom. Reuse what's already in the rack, run on whatever's cost-effective at the next refresh, no HCL gating from the platform vendor.
• A platform you can stake your name on. No vendor that might end your business model next renewal cycle.

Why Proxmox fits all three jobs

• Per-socket subscription, no minimums. SMB sites with low core counts cost the same per socket as dense hosted platforms. No "must buy 72 cores" floor.
• Single platform, single skillset. Same Proxmox VE on a 2-node SMB office and a 12-node hosted platform. Your engineers don't context-switch between tiers.
• Proxmox Backup Server — free, deduplicated, encrypted, immutable-capable. Per-customer retention policies, per-customer restore tests. Included in the platform, not invoiced separately.
• Native multi-tenant primitives — resource pools, role-based access, VLAN/VXLAN isolation, per-customer storage pools. You don't need a third-party portal to keep customers' resources separated.
• Linux-native operations. Your engineers can use standard Linux tooling for everything — Ansible, Terraform, Prometheus, Loki, whatever your existing stack uses. No vCenter-only special cases.

One MSP's numbers

What an MSP engagement looks like

1. Discovery call. Senior engineer (not an SDR) walks through your current service mix, customer profile, hardware estate, and renewal timing.
2. Assessment. Inventory of platforms, sites, and contracts. Output: a written report on what migrates cleanly, what needs redesign, and a realistic timeline that aligns with your customer maintenance windows.
3. Target architecture. Proxmox cluster designs per platform type — hosted, customer-private, SMB/office — with shared operational tooling across them.
4. Pilot site. Move a non-critical platform or office first to validate runbooks before the bigger customer-facing migrations.
5. Batched migration. Per-customer cutovers scheduled into your existing maintenance windows. Customer-by-customer comms supported by us if needed.
6. Operational handover (or co-managed). Documentation, runbooks, knowledge transfer. Optional ongoing managed services if you'd rather we run it.

Thinking about self-service IaaS?

If the next step for your business is moving from MSP-managed hosting into self-service IaaS — customer-onboarding via API, billing-as-a-product, tenant portals, the whole CSP shape — that's a different conversation. We've written it up separately: Proxmox for Cloud Service Providers.

Talk to us

Discovery calls are free and engineering-led — not an SDR triage. Tell us what your platform mix looks like and where the renewal pressure is, and we'll give you a realistic picture of what moving to Proxmox looks like across your customer base.

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