It can technically be anywhere on the network, on a Windows machine with Microsoft Management Console (MMC) present, that will allow it to communicate both with the JSS side and the SCCM side through port 9443 and 8443; we most frequently see it installed on the server that’s hosting the SCCM installation, however.
I haven’t set it up on the JSS before, it’s always been either on its own stand-alone machine or on the SCCM server, but it should work as far as I’m aware.
Having the proxy service running on the SCCM server itself means you don’t have to worry about this particular step: “If you plan to install the JSS SCCM Proxy Service on a server other than the SCCM server, copy the CA certificate (.cer) and the ISV proxy certificate (.cer) to the SCCM server.”
If you haven’t already gone through our article on setting up certificates for the SCCM 2012 plugin, I’d highly recommend reading through it. That KB is located: https://jamfnation.jamfsoftware.com/article.html?id=317
If you haven't already contacted your Technical Account Manager, I'd recommend doing that as well to have them send you the SCCM installation 'worksheet' that we have; it's not required, it's just a tabled document that has space to jot down paths, locations, and names of all the certificates used as that part of the setup tends to trip up a lot of people, usually due to confusion over what certificate goes where.
JAMF Software Support
Also be sure to check out the new version of the SCCM plug-in that was just released this week. It only works with the JSS v9.4 and above but if you are running your SCCM Management Point in HTTPS mode then there is only one certificate to configuring on the proxy server, making it much easier to setup.