To obey MetaQuotes policies the Signal Magician is built as an EA-based trade copier software. This means Server EA and Client EA must be running on MT4 terminals all the time to send and receive trades.
But it does not matter where those MT4 terminals are running.
You can host MT4 terminals on your own Windows VPS servers or leave this to your clients. Actually, the best practice is to offer both options. Then clients choose how they want it.
Some clients will not be comfortable to share their MT4 login information with you and your staff and feel safer by running Client EA by themselves. They can either run it on their own computer or their own VPS server.
Other clients do not care about the privacy of their MT4 account and will be happy to submit their MT4 login credentials on your Signal Magician system. Then, once you have their MT4 login information, you or your staff can use it to install client MT4 terminal, login to their account and run the Client EA.
If you plan to host MT4 terminals of your clients by yourself, then I recommend you to get Windows dedicated servers to be able to run lots of MT4 terminals.