Definition of Business Applications

Hello,

we have a question about the creation of a business application. There i a attribute called install type which contains following options None, On Premise, Cloud, Hybrid and Third Party Hosted. Can anyone explain the main difference between the install type Cloud and the install type: Third Party Hosted with an common example. 

An other question we discussed is about the technology stack and the platform. OOTB you can select only on stack and one platform but sometimes the same Business Application has more stacks and runs on more platforms. Do we have to customize it or is it best practice to create more business applications for each stack and each platform? 

Many Thanks 

Marco