Совсем не обязательно размещать сервер на той же машине, достаточно создать подключение к локальному серверу.
http://webhelp.esri.com/arcgisserver/9.3/java/selecting_svcs_display.htm
ArcGIS Server Local
An ArcGIS Server Local connection is used for connecting to a GIS server on a local area network. ArcGIS Server Local connections are most suitable for Web editing layers and layers that will be worked with through fine-grained ArcObjects.
To make an ArcGIS Server Local connection, you must enter the name of the GIS server you wish to connect to (specifically, the name of the server object manager, or SOM, machine). You must also enter a user name and password that corresponds to an account in the agsusers or agsadmin group on that GIS server