Let's be forward here—what is a Splunk forwarder? A forwarder is an instance of Splunk that has a specific purpose, to input data and forward it to other instances of Splunk. In other words, forwarders have limited capabilities by design. Most forwarders don't include Splunk Web and don't have users logging in and running search pipelines; therefore, they require minimal resources and have little impact on performance. So, they can usually reside on the machines where the data originates. The following diagram gives you an idea of how you can configure Splunk using forwarders local to multiple data sources:

As an example, Splunk can be installed and configured as a forwarder on a number of individual servers that are all perhaps generating similar log data which you want to search centrally. You can then install Splunk on its own server where a user (or a user community) can perform searches. The forwarders on the data-generating servers can then be set up to take...