Hi Ghassan,
An ArcSDE service, also known as an ArcSDE application server or a three-tiered architecture, conveys spatial data between GIS applications and a geodatabase. With an ArcSDE service, a gsrvr process is created on the SDE server for each client connection.
A direct connection is recommended. The direct-connect architecture moves ArcSDE functionality to the desktop. This removes the ArcSDE load from the server and allows additional resources to be freed up for the DBMS, which means you get better scalability on the database server.
Direct connections can be faster if the server is heavily used, because processing takes place on the client machine. Rather than having to process the information on the server, which may be responding to requests from numerous other users at the same time, and send the information back to the client across the network, the client computer is typically only processing a few tasks at a time.
One scenario where you may want to use an ArcSDE application server connection is if your desktop machine does not have enough resources to handle the ArcSDE processes.
