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LEM is its own virtual appliance, so it IS a standalone VM
And, it is structured such that the logs do need to go directly to LEM. You can forward logs you're already collecting in Orion to LEM, but you'd have to forward the raw syslog over.
I have demonstrated LEM using vmware player from my laptop to prospective clients and can confirm it works in this manner. My laptop is an Intel i5 with an SSD and lots of RAM, so it does host it well and suitable for testing/demo purposes only. It might be a bit slow if your pc spec is not up to the minimum requirements.
If you have the OVA template, just launch it in VMware player and it will just work!