Makes sense to opt for this approach as indexing traffic is restricted to a minimum unlike having Content and TREX severs on different systems in diversified locations!!
One of the key focus areas would be arriving at sizing specs for both, the Content as well as TREX server(refer previous threads for details). You may also have to factor in the total number of content servers(cache severs, if applicable) that you intend to set-up for your requirements/usage pattern and then decide the actual host for your TREX server.
Regards,
Pradeepkumar Haragoldavar
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