I'm considering improving the security of my homelab/server setup and I'd love to hear some more experienced opinions on my plans.

Like most self-hosters, I started out with a single-server setup: I cobbled together some old hardware, slapped on a NAS-style OS, bolted on Docker and started experimenting. As things go, my setup has grown a lot over the years. I'm running a lot on that machine - NAS capability, local DNS via pihole, a Wireguard VPN endpoint (so I can tunnel into the LAN from outside), many private services (accessible only from inside the LAN), but also some public ones accessible from the open web.

Although I've tried to do my homework in terms of security (various hardening measures for SSH and Docker, reverse proxy, proper SSL termination for everything), I realise I've put a lot of eggs in that one basket and I might want to introduce some network segmentation.

I don't think I'm ready for getting a hardware firewall or a router/switch capable of VLANs just yet. What I'm considering, though, is putting my services available from the open internet on a separate server inside my network - a little Pi 5 I've still got lying around. My idea is that if a container on that is breached and if an attacker manages to escape the container to gain root access, compromise would be limited to the few of publicly available services I have on the Pi, thus limiting blast radius. If combined with (software) firewall rules that make the Pi a 'pariah node' (dropping all incoming connection efforts), lateral movement to other devices on the network could be contained.

An alternative would be to finally make the move to Proxmox. Everything would still be running on one physical machine, but I'd create several VMs: there would be one for private, one for publicly available services, and I'd firewall the latter off rigorously so it cannot connect to anything else.

I'd like your opinion on these plans. Which one would you recommend? Are they both sound, or is there anything I haven't considered? Are there other (easy, non-hardware intense) things I could do to improve security even more?