For Hyper-V environments where VMs are stored on local storage, the On-host backup proxy should be used. This type of proxy processes jobs directly on the host where the Hyper-V role is enabled, allowing it to interact directly with the local VM storage. It is suitable for infrastructures with multiple Hyper-V servers storing VMs locally.References:
Veeam Backup & Replication User Guide: Hyper-V On-Host Proxy
Veeam Best Practices: Hyper-V Backup Proxies
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