The objects we place in our network container are the computers that run the Internet services. These services are provided by software (the applications) and hardware (the computers). A computer that hosts the applications is called, by a wild leap of imagination, an application host.
When the LIC is up and running Internet clients can start conversations with the LIC servers. The number of hosts needed is likely to change. As each service gets busier it needs more hosts to run on. As new services are added more computers must be added to host them. We start off with a few hosts in the container and can add many more.
Physical presence and virtual presence do not correspond to hardware and software. The physical presence is not just hardware. Lots of software is required to make the data communication happen. The applications that provide the virtrual presence, on the other hand, are only software.
All application hosts are in the Internet DMZ.