Cloud vs. On-Premise¶

Decision framework for choosing between cloud deployment, on-premise infrastructure or a hybrid approach. Use this during the Discovery & Strategy phase before architectural choices are locked in.

1. Decision Matrix¶

Score each criterion based on your situation: C = advantage for Cloud, O = advantage for On-Premise, = = neutral.

Interpretation¶

• Predominantly C: cloud-first approach recommended
• Predominantly O: on-premise or private cloud recommended
• Mixed: consider hybrid architecture

2. Decision Tree (5 questions)¶

1. Does the system process special categories of personal data (health, biometrics)?
   YES → On-premise or private cloud strongly recommended
   NO  → go to 2

2. Is the expected load unpredictable or seasonal (10× variation)?
   YES → Cloud recommended (elastic scalability)
   NO  → go to 3

3. Does the organisation have < 2 FTE available for infrastructure management?
   YES → Cloud recommended (managed services)
   NO  → go to 4

4. Does the sector require full audit control over hardware and data location?
   YES → On-premise or private cloud required
   NO  → go to 5

5. Is time-to-market < 3 months for a working system?
   YES → Cloud recommended
   NO  → both options comparable; base on TCO

3. Cloud Deployment¶

Providers — Comparison¶

Cloud Cost Management¶

Primary cost drivers in cloud AI deployments:

• Inference APIs — cost per token/request (largest variable cost for LLM applications)
• Compute (GPU/CPU hours) — for training and fine-tuning
• Storage — model artefacts, training data, vector databases
• Network — data transfer and egress costs

See Cost Optimisation for reduction techniques (caching, model tiering, batch processing).

Cloud Security Checklist¶

• Data residency configured to EU region
• Encryption at rest and in transit configured
• IAM with least-privilege configured
• VPC/private endpoint for sensitive services
• Secrets management (no credentials in code)
• Logging and audit trail active
• Budget alerts configured

4. On-Premise Deployment¶

Infrastructure Requirements¶

Software Stack (open source options)¶

TCO Calculation (simplified)¶

CapEx (one-off):
  Hardware:            €_______
  Installation/setup:  €_______

OpEx (annual):
  Energy:              €_______ /year
  Maintenance/admin:   €_______ /year  (1–2 FTE × rate)
  Licences:            €_______ /year

Compare with Cloud:
  Expected cloud costs:  €_______ /year
  Break-even point:      _______ years

5. Hybrid Architecture¶

The most common hybrid patterns:

6. Recommendations by Organisation Profile¶

Related Modules¶

• Cost Optimisation
• AI Architecture
• MLOps Standards
• Data Pipelines