As you grow the number of servers that need to talk to one another, the host-based firewall configuration tasks start to become a bit more unwieldy. Of course, whether or not the host firewall is used is specific to individual organizations. I've seen some that use them and some that don't.
Example: When deploying System Center, I generally recommend that admins deploy all of the System Center servers behind a single firewall and to not run a firewall on each of the servers. There are simply too many ports to keep track of for smaller shops and that front end firewall is often a "good enough" solution.
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