You have some IT infrastructure set up at your home and/or workplace. Might be file- or media servers, might be a hosted website, might be collaboration tools or timekeeping software.
Now a good internet connection might allow you to simply pay someone *else* somewhere out there in the world to provide the physical infrastructure to run those services. The business saves on maintenance and (possibly) local physical space at the cost of relying on a 3rd party host. Usually that 3rd party (a professional datacenter) has a better redundancy than any small or medium business though.
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