Hi Ashwini,
Diagnostic agents gather information from managed systems, and the information from managed system is then reported to SAP Solution Manager System for analysis.
You can find detailed information under :
Diagnostics Agents - SAP Solution Manager Setup - SCN Wiki
SAP Host Agent - SAP Solution Manager Setup - SCN Wiki
SAP Note : 1365123
Please go through below document to install Diagnostics Agent.
Step by step how to Install Diagnostics Agent and connect the agent to adaptive computing
Regards,
Omkar