On-premise vs. private cloud: where does your private LLM run?
A private LLM can run in two places: on-premise on your own hardware, or in a private cloud within the EU. Both keep your data shielded; the difference lies in control, costs, scalability and management.
Which fits depends on your existing infrastructure, your requirements and your growth plans. Often a hybrid setup is also possible.
The options at a glance
| Criterion | On-premise | Private cloud (EU) |
|---|---|---|
| Control over hardware | Maximum, everything in-house | High, via an EU provider |
| Startup costs | Higher (own hardware) | Lower, no hardware investment |
| Scalability | Bound to your own capacity | Flexible scale-up and down |
| Management | In-house or outsourced | Largely with the provider |
| Data location | Your own server room | EU datacenter of choice |
| Time to launch | Longer, hardware setup | Faster to go live |
The differences explained
Control versus convenience. On-premise gives maximum control: all hardware is physically in your own environment. A private cloud removes hardware management from your hands while your data stays shielded within the EU.
Costs. On-premise requires a larger upfront investment in hardware. A private cloud spreads the costs and avoids that initial outlay, but has ongoing hosting fees.
Scalability. If you grow fast or your usage fluctuates, you scale up and down more easily in a private cloud. On-premise is bound to the capacity you have purchased.
Which fits your organisation?
Choose on-premise if you have strict requirements about physical data location, already own infrastructure and management capacity, or operate in a sector where that is mandatory.
Choose a private cloud if you want to start faster, scale flexibly and prefer to hand over hardware management without losing control over your data.
In doubt? In the AI-readiness scan we determine together which setup, or which hybrid form, best fits your situation.
Read more: What does a private LLM cost? · Private LLM for enterprises
