Context: I’m using a 1GB server to run all my apps; Email server, Peertube, Pleroma. I feel like a psychopath but it’s all running well with a swap file to keep things from killing itself with OOM. Basically it has to be lightweight. It doesn’t have to be easy to set up, just the software has to be future proof and runs on low resources.
Try Prosody first. For single or few user instances it uses less RAM. Ejabberd scales better for big instances with thousands of users though.