I'm curious to learn why, if there's any more you can share. What about vertical scaling, i.e. bigger machines instead of more of them? Can't that go pretty far?
For everyone that will say "well why..."
1. real products need a generally available shipping unit (SKU) when your customers are enterprise / telco types.
2. for item 1, what is the lowest common thing this type of customer would take - a VM they can run on their existing virtualization setups. the reality of K8s, containers in this type of customers at that point was near zero.
3. there was thoughts about a SKU of a HW appliance, ie, beefy server and just toss CPU/RAM in it and ship that. shipping some stupid HW appliance that we controlled would just be a distraction and a waste of money also requiring 2 shipping artifacts, 2 test setups, etc. not to mention the need to sort for support for HW failure (you can contract with Dell for example to have them label their Kit as your appliance).
I don't understand the issues with using a bigger VM, but I have no reason to doubt you.