What type of solution runs applications on servers located in a centralized location?

The correct choice is Terminal Services because it specifically refers to a technology that enables users to run applications on centralized servers and access them remotely from their own devices. This model allows multiple users to work with applications hosted on a server, rather than requiring each user to install and run the software on their individual machines.

Terminal Services works by creating a session for each user on the server, and any input is sent to the server while the server processes the tasks and sends back the display outputs to the user's device. This central management improves resource utilization, simplifies software updates, and enhances security since sensitive data can be kept on the server rather than distributed across various endpoints.

While Cloud Applications do involve centralized application access, they usually embody software as a service (SaaS) that is hosted in the cloud, which may not distinctly use the concept of sessions as Terminal Services does. Application Layering focuses on creating modular applications that can be dynamically assigned and provisioned but does not imply a centralized execution on servers like Terminal Services. Remote Application Services is somewhat vague but generally refers to technologies allowing remote access to applications, which encompasses a broader range of solutions, making Terminal Services the more accurate answer for the specific scenario described.