Hardware virtualization plays a major role in IT infrastructure optimization in private data centers and public cloud platforms. Though there are many advancements in CPU architecture and hypervisors recently, but overhead still exists as there is a virtualization layer between the guest operating system and physical hardware. This is particularly when multiple virtual guests are competing for resources on the same physical hardware. Understanding performance of a virtualization layer is crucial as this would have a major impact on entire IT infrastructure. This article has performed an extensive study on comparing the performance of three hypervisors KVM, Xen, and Proxmox VE. The experiments showed that KVM delivers the best performance on most of the selected parameters. Xen excels in file system performance and application performance. Though Proxmox has delivered the best performance in only the sub-category of CPU throughput. This article suggests best-suited hypervisors for targeted applications.