The first step in building a three-tier application is to define the problem you are trying to solve. This is the purpose of application definition. Your completed application definition should include a set of documents defining the business problem, the functional specifications in terms of scenarios, the performance requirements, and the interoperability requirements. You and your customer should sign off on these documents.
Conceptual design follows application definition. During conceptual design, you model the persistent data, the data objects, the business objects, and the presentation layer. The deliverables from conceptual design include a document containing the data model, a design document describing the public interfaces of the data and business objects, and a design document defining the user interface of the application.
When the conceptual design is complete, you can begin looking at the physical architecture of your application. During physical design, you group COM classes into components, group components into MTS packages and processes, and assign packages and processes to machines. The deliverables from physical design include component and deployment diagrams. The physical design does not need to be completely defined at this point; however, you do need to determine how COM classes will be grouped into components prior to implementation.