Piyush, the article that you asked about has a pretty good description for "what is it for" if you read the box labeled "Important" in the beginning of the article.
The box says:
For most types of environments, you can apply a deployable package to an environment directly from Microsoft Dynamics Lifecycle Services (LCS). For more information, see Apply a deployable package on a system. Therefore, this topic applies primarily to environment types that don't support the application of updates via LCS. Examples include local development environments (downloadable virtual hard disks [VHDs]), multi-box development/test environments in Microsoft Azure (LCS Partner and trial projects), and build environments.
