It is strongly recommended that the database server and the installable cloud app (more specifically, the PowerServer Web APIs) should be located on the same LAN. If the database is not on the same network as the PowerServer Web APIs, every request has to go a long way from PowerServer to the database, it is very likely that there will be performance and security issues.
It is also required that you enable TLS 1.2/TLS 1.3 for the file transfer between the client and the file server, and also enable TLS 1.2/TLS 1.3 for the REST communications between the client and PowerServer (as Installable cloud apps make HTTP requests to the server to download the app files and necessary runtime files and make HTTP requests to PowerServer Web APIs to request services and transfer data).
