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Application Gateway backend pools can contain:
- Virtual machine scale sets
- Public IP addresses
- Internal IP addresses
- Multitenant backends (such as App Service)
Application Gateway backend pool members aren't tied to an availability set. An application gateway can communicate with instances outside of the virtual network that it's in. As a result, the members of the backend pools can be across clusters, across datacenters, or outside Azure, as long as there's IP connectivity.
More info: https://learn.microsoft.com/en-us/azure/application-gateway/application-gateway-components#backend-pools
In your case, if the backend is hosted in your private network onpremise you should use VPN (or Expressroute) allowing traffic between both ends.
If the backend is exposed to the Internet you can just use public IPs (or FQDN).
I hope this helps!
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