One recurrent question about vCenter Server installation is whether it should be installed on a physical server or a VM. Technically, vCenter Server can be installed on both destinations, but I prefer deploying on a VM. Why?

If you have the vCenter Server installed on a VM and the ESXi that hosts the vCenter Server fails, HA will restart the VM on another node, ensuring service availability. If a physical server with vCenter Server installed fails, you lose not only the vCenter Server but all the services it provides. The best option would be having a management cluster with vCenter running on it (this perhaps makes more sense for large environments), but it would be an expensive solution the business could not afford/approve.

Another option could be placing the vCenter Server in the running cluster of your vSphere environment, a common approach for small environments. In large environments, if you need to shut down the infrastructure or perform some maintenance, it could be useful to know precisely which ESXi is hosting the vCenter Server without wasting time on research between hosts.

VMware recommends deploying vCenter Server on a VM, suggesting the use of the vCSA. vCSA is replacing the Windows-based vCenter Server which will be deprecated quite soon.