SharePoint terms can be a bit confusing. In the context of SharePoint, a farm is a collection of one or more SharePoint servers (physical or virtual) that share a single SQL Server configuration database. A farm can support one or more SharePoint web applications. A web application is a Microsoft IIS website acting as a logical unit for one or more site collections. A web application isolates content from other web applications through a separate content database and authentication method.

A site collection is a hierarchical structure that includes one top-level site and, optionally, one or more sites below it. If you hear someone say "SharePoint site," the person is likely referring to a site or site collection.

Organizations can choose to deploy multiple farms for geographic reasons (e.g., a set of regional farms to ensure acceptable performance for remote locations) or to isolate resource-intensive services (e.g., a separate farm to manage searches). Organizations that deploy multiple SharePoint farms need to realize that some, but not all, service applications can be shared across farms. In other words, a web application within one farm can be configured to use a service application from a separate farm. An end user has no idea that this cross-farm service application is actually hosted on a separate farm. (For more information about cross-farm deployments, see the Microsoft TechNet article "Services architecture planning (SharePoint Server 2010).")

In addition to the Search service application, examples of other cross-farm service applications include the User Profile and Secure Store Service. Unfortunately, none of the business intelligence (BI) services -- PerformancePoint Services, Excel Services, PowerPivot for SharePoint, or SQL Server Reporting Services (SSRS) -- are currently available as cross-farm services.