IBM QRadar has a modular architecture that can scale to meet log and flow collection and analysis needs. It operates in three layers - data collection from sources like logs and flows, data processing through rule matching and storage, and data searches through the user interface. Common components include the Console, Event Collectors, Event Processors, Flow Collectors, Flow Processors, and Data Nodes to add capacity. Events represent point-in-time logs while flows are records of network activity sessions between hosts.