That is a terrific question. But first when we talk about Sharepoint integration, we are talking about Reporting Services and Powerpivot.
Both Reporting Services and Powerpivot are implemented as distributed applications with components that run on the Web Front End (WFE) and Application tiers, whilst application data is stored in the Data Tier. These components in the integrated B.I. stack tie into the three tiers as illustrated below :
There are different ways the WFE, Application and Data Tiers can be deployed. Installing everything on the one server offers the simplest deployment and simplest licensing model however you are limited to the processing power of that single server. All other deployments are distributed across two or more servers, which means you have some flexibility to build capacity around where you need it : either the WFE, the application tier or the data tier.
So to answer the question “Should I Install Everything on One Box?” you need to do some capacity planning around each of these tiers. It might also pay to plan to put some parameters around the software and hardware budget as the 2 and 3+ tier deployment have licensing implications.
Likewise, these latter deployments require careful planning around security – so if your organisation doesn’t want to play Kerberos, this could be a showstopper, or at least an incentive to deploy everything on a Single Server.
The different deployment modes are outlined as follows :
1. Single Server (1-Tier)
Everything is installed on the same box – nice and easy. All other deployments will have important licensing considerations as well as careful planning around security (Kerberos and Claims Authentication).
2. Two Servers (2-Tier)
WFE and Application Tier on Server 1 and Data Tier on Server 2
3. Three Servers (3-Tier)
Application Tier on Server 1 and Data Tier on Server 2 and WFE on Server 3
4. More than Three Servers (3-Tier Scaleout)
Application Tier on Server 1 and Data Tier on Server 2 and multiple WFE’s on Servers 3+1
Enjoy more about deployment topologies here Reference – http://msdn.microsoft.com/en-us/library/hh231674.aspx