Electric tanks and tankless do not have a vent, so they can go inside. Replacing an electric tank with a tankless can be put roughly in the same location. Although one might want it shifted to the side.

For those with gas, most people use an outdoor tankless in warm climated. However, there are models that can go inside. Current indoor tankless require a fresh air source, and an exhaust. Both are ok with using PVC pipes. 3 or 4 inch dia.
Also, current gas fired tank units would need the same air in&out pipes.
Combustion gasses need to vent outside.