SharePoint 2013 Apps Hosting Models

1) SharePoint-hosted This model relies on a sub web of the parent site (also called an app web)

and enables you to use all the common SharePoint artifacts for implementing the UI and the

behavior of the SharePoint app. You can take advantage of all the features of SharePoint, such

as lists, Web Parts, pages, workflows, and so on.( Normally used for office 365 apps and Sharepoint development )

2)  Autohosted Apps following this model are hosted on Microsoft Windows Azure, which can

access a Microsoft SQL Azure database for managing data, too. The apps are automatically

deployed on Windows Azure on your behalf and can communicate with SharePoint through

events and the Client Object Model. Secure communication with SharePoint is enforced

using OAuth.

3) Provider-hosted From a functional perspective, apps that follow this model are almost

the same as autohosted apps. The only difference is that a provider-hosted app has to be

deployed on your own hosting environment and does not necessarily use the Windows Azure

environment.