OK - that's an odd one lol
Windows 7 SP1 VM, SQL 2008R2?
there could be a lot of variables at play here - run perfmon or resource monitor and see the metrics (CPU, I/O, etc.)
that's such an odd combination - if I were you, I'd put it on windows server VM, and based on the small number of assets, it's up to you, but I'd use either a higher version of SQL server, or use SQL Express with your current windows 7 setup...
I know you can go from SQL Express to MSSQL, but not sure if you can go backwards...