Small environment

In a small environment, you can have all the VMM components located on the same server. A small business may or may not have high availability in place, as VMM 2016 is now a critical component for your private cloud deployment.

Start by selecting the VMM server's location, which could be a physical server or a
virtual machine.

You can install SQL Server on the VMM server as well, but as VMM 2016 does not support SQL Express editions, you will need to install SQL Server first and then proceed with the VMM installation.

If you are managing more than 10 hosts in the production environment, my recommendation would be to have SQL Server running on a separate machine.

It is important to understand that when deploying VMM in production environments (real-world scenarios), the business will require a reliable system that it can trust.

The following figure illustrates a real-world deployment where all VMM 2016 components are installed on the same VM and SQL is running on a separate VM.