Who said the database needs to be "in the cloud"? It just shouldn't be on the same machine as your users.
I don't ask my users to install Visual Studio, IIS or Windows Server 2012 on their boxes. I kind of think asking them to install SQL Server is similarly foolish - particularly since now you have to pay for 1 SQL server licence per user rather than 1 per organisation.
Care to point me to the client side libraries I can use to access that database from a Windows Store app?