Early architectures deployed code on physical servers. Each server was arranged in a rack with a switch and a storage array:

The components of a rack (server blades, network switches, and so on) are often classified in terms of their sizes or Rack Unit. This is a unit of measure used to describe the height of a device mounted in a 19-inch rack or a 23-inch rack and is approximately 44.45 mm (1.75 inches) high. Device form factors are often in terms of multiples of rack units (1U, 2U, and so on).

Physical servers provide the best performance for hardware, however, they are difficult to manage, are often unevenly utilized, and don't really have scalability (scaling here implies buying new hardware).