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When most of the integration data is lying inside an organization's data center and data is highly secured, then the On-Prem deployment model is the right solution.
It does offer the flexibility to set up your load balancing, domains, VPC, and anything you want to do to your environment as you will be building it in your own data center. You can cluster specific servers that you have in your infrastructure and set them accordingly.
Mule developers build integration solutions that must cater to high volumes of real-time and batch data. In some cases, the size of payloads can be larger than memory. In others, API solutions may have to handle high rates of API calls per second.
Horizontal scalability, whereby Mule instances are deployed across multiple virtual and physical machines, is costly. Thus, a single Mule instance must utilize to the maximum underlying processing and storage resources as it handles traffic. Its ability to handle more traffic with more underlying resources is what we refer to as vertical scalability.