What are the differences of an sap sid and host name?

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SID is nothing but a name for an Instance.
Host is  the system which hosts the Instance.

Hope you will get an idea with the following example,

Local Installation: Here we have both Database Instance[DB SID] and the Central Instance [SAP SID] in same system. i.e Hostname is same..

Domain Installation: Here we have different hosts to hosts Database instance & Central instance. i.e. 2 hosts.


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