TL;DR: Self-hosted = complete data control, lower costs at scale, no vendor lock-in. Cloud = faster deployment, zero infrastructure management, lower upfront cost. Under 1,000 monthly interactions: start cloud. Above that: consider self-hosting.
Where your agent runs matters more than which model it uses.
## Self-Hosted
Agent software on servers you control. Your hardware, dedicated cloud instance (AWS, GCP, Azure), or private environment. You install, configure, maintain. AI API calls go to the provider, but all business data stays on your infrastructure.
## Cloud-Hosted
Platform on vendor's servers. Web interface access. All data on their infrastructure. They handle everything.
## The Data Question
Cloud: Conversations, knowledge base, business data on someone else's servers. Policies change. Breaches happen.
Self-hosted: Data never leaves your infrastructure. You control access, retention, encryption, deletion.
HIPAA, SOX, PCI, government = self-hosting isn't optional.
## Cost Comparison
### Cloud ($0.10/conversation)
- 1,000/month: $100 + platform - 10,000/month: $1,000 + platform - 100,000/month: $10,000 + platform
### Self-Hosted
- Server: $50-$200/month - AI API: $0.01-$0.05/conversation - 1,000/month: $60-$250 - 10,000/month: $150-$700 - 100,000/month: $1,050-$5,200
Crossover: 2,000-5,000 conversations/month. Below = cloud cheaper. Above = self-hosted dramatically cheaper.
Hidden cost: infrastructure management. Budget $500-$2,000/month for managed hosting without technical staff.
## Control
Cloud limits customization. Self-hosted (especially open-source) gives complete control. Custom integrations, logic, interfaces.
## Reliability
Cloud handles uptime for you. Self-hosted is your responsibility — done properly, can be more reliable since you control the entire stack.
## Our Recommendation
Start cloud: First agent, under 2,000/month, no technical staff, validating concept.
Move to self-hosted: Over 5,000/month, sensitive data, deep customization needed, eliminating vendor dependency.
Go directly self-hosted: Regulated industry, hard privacy requirements, enterprise scale.
## Frequently Asked Questions
Can I start cloud and migrate? Yes, but not trivial. Requires rebuilding knowledge bases, reconfiguring integrations.
Is self-hosting secure without expertise? Use managed cloud providers, follow best practices, keep updated, encrypt everything.
What if my server goes down? Automated monitoring, alerting, redundancy, failback plans. Manageable with proper ops.
Do I need internet for self-hosted? Yes, for AI API calls. Data stays local — only prompts and responses travel to the provider.
Best cloud providers? AWS, GCP, Azure. For cost efficiency: DigitalOcean or Hetzner.
---
We deploy agents on your infrastructure — you own everything. [Get started](/get-started).