CloudorOn-premise
Cloud runs the system on someone else’s machines, billed by usage. On-premise runs it on machines you own and operate, and the choice turns on how the data circulates and which models you can reach, rarely on price.
Point by point
| Criterion | Floor 4Floor 4 · The Organisationa mosaic: AI is only one tile among manyCloud | Floor 4Floor 4 · The Organisationa mosaic: AI is only one tile among manyOn-premise |
|---|---|---|
| Models available | All of them, the best performing included | Only the open-weight ones |
| Kind of cost | Variable, by usage | Fixed: hardware, operations, skills |
| Data leaving | It leaves your perimeter | It does not leave it |
| Control of the version | The provider can change it | You decide, it does not move |
| Time to start | A few minutes | Weeks to months |
| Who answers for availability | The provider, by contract | You |
On the ground four situations
A health service handles medical reports that must not leave the institution.
Floor 4 · The Organisationa mosaic: AI is only one tile among manyOn-premiseNo contractual undertaking replaces the fact that the data does not leave. That is the reason that is not up for discussion.
A team wants to evaluate three leading models within a fortnight before deciding.
Floor 4 · The Organisationa mosaic: AI is only one tile among manyCloudThe best performing models cannot be downloaded, and standing up an infrastructure for a trial would be absurd.
An organisation chooses self-hosting to cut its bill, without counting the time spent running it.
An incomplete calculationThe useful counter-example: the heaviest item is human time, and it appears on no invoice. Comparisons that keep only the hardware come to the wrong conclusion every time.
A system routes sensitive documents to a self-hosted model and everything else to an online service.
BothThe most common architecture in practice. It assumes the data has been classified beforehand, which is in any case a prerequisite for any governance.
The test that settles it
Ask whether a given piece of data is allowed to leave your perimeter. If the answer is no, the question of price no longer arises. If it is yes, compare, counting your team’s time.
The trap
Confusing hosting with sovereignty. Running on your own machines a model designed elsewhere, trained on unknown data and executed on imported hardware settles a question of location, not one of dependence.
Check click your answer
Level 1 · Recognise
Which reason most solidly justifies self-hosting?
Level 2 · Distinguish
What do you necessarily lose by choosing self-hosting?
Level 2 · Distinguish
Is the choice between cloud and self-hosting a binary one?