The Connected Business backend needs to be on the same network, but can be spread across multiple servers for scalability. Here is a video that details that – https://vimeo.com/130648131
The main reason for this is so everything can be run in real-time.
For those that want to self-host, there is an option to host the images offsite since they take up the majority of the bandwidth. We have several customers run fairly busy websites with DSL lines that way.