The backup proxy compresses, deduplicates and sends data to the backup repository. By default, the role of the backup proxy is assigned to the host. The on-host backup proxy does not need any manual configuration.
You can deploy an off-host backup proxy to remove unwanted overhead on the production Hyper-V host. The off-host backup proxy is used in complicated scenarios, that is why we omit its configuration in this guide. For more information, see the Off-Host Backup Proxy section in the Veeam Backup & Replication User Guide.