My team went through MS ARC training.  The trainer stated the update manager was just a orchestrator.  It calls the patch management that is configured on the machine.  I.E. If WSUS was configured to be the patch management system for a server, update manager would just use WSUS to check for updates and apply updates.  

An announcement has been made that WSUS is deprecated. SCCM relays on WSUS to be the patch repo.  Update manager is an orchestrator.  The question is, if we are using ARC with update manager what should be the patch repo?  Do we need to run an on-prem WSUS server so update manager has a place to install patches from?