I run mine on exactly that: a Dell R720 sitting on a rack next to my desk from within a Debian 9 virtual machine inside ESXi.

I actually want to do the opposite: transition this to dedicated hardware (like a Pi, but worried about performance) that is a little less noisy. This is shockingly quiet for a 2U but I am a stickler for silence.

Some pix: https://imgur.com/a/0xwcfNN

I use ESXi and one of the VMs is pfSense. pfSense has an additional software package called pfBlocker, which is highly configurable and just plan awesome for blockings ads/trackers/etc for the LAN. pfSense has tons of other options - I setup a vLAN and all of my IoT devices are segregated onto it. That way they can't interact with the rest of the devices on the LAN.