I’ve always worked in a datacenter (non cloud) with separate db servers to the app servers. Besides network latency, what is the advantage of collocating the http server and database server on one machine?

It’s always given me a separation of concerns good feeling by seeing a dedicated db and app server and doesn’t seem like much overhead, given they are nearby machines in datacenter.

Also, our main reason was sharing a database license to have a well resourced multi-tenant/app db sever serving peripheral web app servers.

The biggest one is latency. Network latency will almost always be orders of magnitude bigger than I/O latency. There's a whole class of problems that goes away when latency becomes very small.

Noted, that confirms my suspicion. Thanks.