I have 2-3 source systems which are on-prem databases. I am planning to use Logic Apps to connect to these source systems. As per the Azure documentation we need to install a On-Prem Gateway on a local computer. I am skeptical of this methodology as it demands dedicated system, so not sure if this works in actual production scenario. Please can you suggest what is the right way to do it.
On-prem SQL Server to Azure
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Here is how to connect to on-premise data sources:
If the services are accessible over the internet then you call service endpoint over HTTP or HTTPS from azure logic apps. This article will help you with details steps to be followed: https://learn.microsoft.com/en-us/azure/connectors/connectors-native-http
If it is not accessible over the internet then this article will help with step by step process: https://learn.microsoft.com/en-us/azure/logic-apps/logic-apps-gateway-connection
Before you can access data sources on premises from your logic apps, you need to create an Azure resource after you install the on-premises data gateway on a local computer. Your logic apps then use this Azure gateway resource in the triggers and actions provided by the on-premises connectors that are available for Azure Logic Apps.
Also check this for reference.
You may also want to consider the costs.