iOS "Private"/AdHoc App Store - principle of operation

How do the "private" app stores operate from a technological point of view?

For example, this store used in Iran: http://sibapp.com/

My questions are:

1. Do they require jailbreak?
2. How the apps are distributed, compared to the standard App Store.

You can enrol Apple Enterprise distribution program and create distribution certificate to create private environment. Apple also provide own environment or you can use third party ex. Air-Watch. Refer(Air-Watch)