Host vs Instance vs System
A host is the operating environment in which the SAP HANA database runs. The host provides all the resources and services (CPU, memory, network, and operating system) that the SAP HANA database requires. The storage for an installation does not have to be on the host. For multiple-host systems, a shared storage or a storage that is accessible on-demand from all hosts is required.
For more information about the restrictions that apply to host names in SAP systems, see SAP Note 611361 in Related
An SAP HANA instance (HDB) is the smallest operational unit on a host. It is the set of SAP HANA system components that are installed on one host. A single-host system contains one instance on the one host. A multiple-host system contains several instances distributed across the multiple hosts (one per host). Every system has an instance number, which is a two-digit identifier. Each instance in a multiple-host system must have the same instance number.
A system is one or more instances with the same number[System number here ]. If a system has more than one instance [multi host scenario ], they must be dispersed over several hosts as a multiple-host system. Every system has a unique SAP system ID (SID).