Server 2016 DC and Exchange - Separate VM's or DC on Host Machine with Exchange on VM?

We currently have SBS2011 and We want to move to Server 2016 as our DC with Exchange 2016.
We don't need any advice for setting-up Server 2016 as a DC or Exchange 2016 - however

Should we-

Setup and configure Server 2016 as a DC on physical hardware - install the Hyper-V element and setup a VM to run Exchange 2016 (within the DC environment)?
Do we setup the host OS (Server 2016) on Physical hardware and install the Hyper-V element - THEN setup 2 VM's - one as the DC and the other as Exchange.

Which is the best configuration please.
Thank you
Paul EvansAsked:
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IvanSystem EngineerCommented:

best practice is to use 2 VM, since running Exchange on DC is not recommended, and that is the way I always do it.

Beside that, I always go with full server install, and then simple add Hyper-V role. Single Server 2016 Standard license will cover 2 VM, as long as you don't deploy any additional services on Hyper-V host. It is easier to manage it that way, or at least it is for me.

PS: You can read MS recommendation regarding Exchange + DC on same VM here:

Robin DadswellOffice 365Commented:
The best configuration would really be 2 VM's, I wouldn't recommend using the host as a multi-roled server


Paul EvansAuthor Commented:
Hi Ivan

Thanks for the help.
I wasn't looking to to run Exchange on a DC - i recognise that's not good practice.

What I was considering is Server 2016 DC on physical hardware (the server) and then run Exchange 2016 WITHIN a VM on that DC.

Is this the same as running Exchange on a DC?
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Lee W, MVPTechnology and Business Process AdvisorCommented:
The Hyper-V host should ALWAYS be *JUST* the Hyper-V host.  It affects your licensing!  You get 1+2 licenses with Server 2012 and 2016.  That means 1 physical install (to the host, PROVIDED it is *JUST* a Hyper-V host - no other roles installed or used) and 2 VMs.  Your system will be more stable running in this configuration.

No, while I *THINK* Exchange can technically be installed on a DC as a supported configuration, no professional with any experience would do this. Split the roles on two VMs.

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Philip ElderTechnical Architect - HA/Compute/StorageCommented:
I have two very thorough EE articles on all things Hyper-V:

Some Hyper-V Hardware and Software Best Practices
Practical Hyper-V Performance Expectations

The host can only be Hyper-V with no other roles. One cannot run a DC on the host along with the Hyper-V Role for licensing reasons but also Hyper-V makes too much of a network stack change to be compatible with a DC running in same.

Run them as a pair of VMs with the host set up with the Hyper-V Role only.
Paul EvansAuthor Commented:
All comments were helpful - i went for best solution with Lee W simply because it was concise and direct.
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