In a typical 3-tier application, the application user's workstation contains the programming that provides the graphical user interface (GUI) and application-specific entry forms or interactive windows. (Some data that is local or unique for the workstation user is also kept on the local hard disk.)
Business logic is located on a local area network (LAN) server or other shared computer. The business logic acts as the server for client requests from workstations. In turn, it determines what data is needed (and where it is located) and acts as a client in relation to a third tier of programming that might be located on a mainframe computer.
The third tier includes the database and a program to manage read and write access to it. While the organization of an application can be more complicated than this, the 3-tier view is a convenient way to think about the parts in a large-scale program.