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Creating a publication - does box location matter?

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My company has some equipment that relies on SQL Server 2005, which is on a single computer (call it 'Cloverleaf').  We have a second computer ('backup') that also has SQL Server 2005 installed, and they are connected over our company LAN.

I would like to set up the 'backup' computer as a replication subscriber for the 'Cloverleaf' computer that runs our equipment.  I want the 'backup' computer to be the distributor as well to save processing power on the computer running the equipment.

So, I set up the 'backup' account as a distributor.  Next is to designate a publisher.  Is it OK if, on the 'backup' computer, I connect to the 'Cloverleaf' computer and set it up as a publisher that way?  Or, do I need to go out to the 'Cloverleaf' computer and use that computer to set up the publisher?



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