I have an HP Proliant DL180 G6 server with 4 x 1TB midline drives, giving me 2TB usable storage. Windows 2008 is installed on it (bare metal) and it only runs Veeam. It backups our VMs over the normal network once a night, I haven't bothered separating out the traffic.
I do one full backup once a week and incrementals thereafter. The full backup is then copied on to 2TB external drives, which I rotate. I keep the latest backed up external drive at home. Incrementals are backed up to the cloud. The full backup file is about 1TB, and the incrementals are about 9GB.
So in a complete disaster, where everything has gone including the Veeam server, I can restore the weekly backup using the external drive and then restore the incrementals from the cloud. So I can always recover to the previous night.
I wouldn't have a strong issue with running Veeam as a VM, but it adds an extra layer of hassle if it craps out and I don't need that.
I installed a separate USB 3.0 card in the server, which makes backing up to an external drive pretty quick. It takes about 4 hours to do 1TB.