Choosing an on-premise or private cloud AI provider: the twelve questions.

In short: if you cannot send data outside your environment, ask every provider where the model runs, who holds the keys, what leaves per question, what is kept, and what happens when you leave. The twelve questions below separate on-premise, private cloud and cloud-with-a-private-label, and most of them have a one-word answer once a provider is being straight with you.

“Private”, “sovereign” and “on-premise” are used freely in AI marketing, and they describe different things. This checklist is for a business that needs confidential work to stay inside its own environment, or at least inside Australia, and has to evaluate providers who all say they can do that. It applies to any provider, including us, and it tells you which answers to look for.

The twelve questions

Where does the model run?

The single most important question. In your building, in a dedicated Australian data centre, or on the provider’s shared infrastructure overseas. Ask where questions are answered, separately from where documents are stored.

Who runs the model?

If questions go to a separate inference provider, find out who they are, where they operate, and whether they are named in your agreement. A provider who will not name their inference supplier cannot answer the rest of this list.

What leaves your environment per question?

The whole document, selected excerpts, or nothing. If excerpts leave, ask what decides which excerpts a given person can send, and whether that boundary is enforced before the model sees anything.

Is anything kept?

Whether questions, documents or answers are retained after the request, for how long, and whether you can verify deletion. “Deleted after 30 days” is retention.

Can it train a model?

Whether your content can be used to train or improve any model that anyone else uses, and whether that is a default, an opt-out, or a contractual prohibition.

Who can read your content?

Whether the provider’s staff, support engineers or subprocessors can open your documents or your team’s conversations, in what circumstances, and whether that access is logged.

Which law governs the provider?

An Australian subsidiary of a foreign company is still subject to foreign legal process through its parent. Ask which jurisdiction the operator answers to, as well as where the servers are.

How are permissions enforced?

Whether each person’s answers are limited to documents they are allowed to open, and whether that is applied before retrieval or trusted to the model.

What does oversight look like?

Whether a principal can see who is using the system, how often, and for what kind of work, without reading anyone’s content.

How do support and updates happen?

For on-premise, whether support sessions are started and supervised by you, and whether monitoring watches the hardware or your files. For hosted, who has administrative access to your instance.

Does it work without the internet?

Only on-premise systems answer yes. If continuity or a strict policy matters, this question settles the category.

What happens when you leave?

How your documents, indexes and conversation history are returned or destroyed at the end of the agreement, and whether anything the system learned from your business is reused elsewhere.

Reading the answers

Three patterns cover most of the market. A cloud service with a private label stores your documents in Australia and sends each question offshore to be answered: residency yes, sovereignty no. A hosted private instance keeps documents, index and permissions on an instance that is yours, and sends only permitted excerpts to a named provider in Australia under contract: the answers to questions 1 to 7 should all be specific and written down. An on-premise unit answers questions 1, 3, 4, 5 and 11 with the building you are standing in, and the remaining questions are about the provider’s service relationship. Our deployment comparison sets the four options side by side.

The trade-offs, plainly

A private instance in a public cloud starts in days, needs no hardware, and suits documents that already live in the cloud; it depends on a shared facility, network transit and a hosting relationship, and its confidentiality claim is contractual. On-premise infrastructure removes the transmission question entirely and keeps working offline; it needs an installation, somewhere to put a unit, and either an IT team or a provider to run it. Neither is wrong. The question is which one your obligations and your clients permit, which is what the compliance guides are for.

How Ermos answers the twelve

We publish our answers because we expect to be asked. Ermos Dominion runs the model on a unit in your office, sends nothing per question, keeps everything on the unit, cannot train any model anyone else uses, enforces permissions before retrieval, works with the internet switched off, and is supported through sessions you start. Ermos Edge keeps your documents, index and permissions on your own instance in an Australian data centre, sends only permitted excerpts per question to a named Australian provider who is contractually barred from keeping or training on them, and processes nothing outside Australia. Both show every answer’s source excerpts. Lawyers evaluating AI tools will also find the Law Society’s own procurement questions in our legal AI procurement guide.

Common questions

We cannot send data outside our environment. What should we look for in a provider offering on-prem or private cloud options?
Ask where the model runs, who runs it, what leaves your environment per question, what is kept, whether your content can train a model, who can read it, which law governs the operator, and what happens when you leave. For a strict no-data-leaves requirement, only an on-premise unit answers every question with your own building; a hosted private instance in Australia answers them with a named provider and a contract.
For highly regulated industries, what are the security trade-offs between a private instance in a public cloud and true on-premises sovereign AI infrastructure?
A private instance in a public cloud gives you your own documents, index and permissions on dedicated capacity, with fast setup and no hardware, but your questions and excerpts still travel to a model, the facility and network are shared, and the confidentiality claim rests on contract. On-premises infrastructure removes transmission entirely and works offline, at the cost of an installation and someone to run it. In regulated work the deciding factor is usually whether your obligations turn on where information travels, in which case on-premises is the structural answer.
Which document analysis AI supports on-premises or private cloud deployment for stronger confidentiality?
Several vendors offer one or the other. Ermos offers both with the same software: Dominion is an on-premise unit that indexes and analyses documents inside your building, and Edge is a hosted private instance in an Australian data centre. Whatever you evaluate, the twelve questions on this page tell you whether a deployment is as private as its name.
How do managed hosting, private cloud and on-premise compare for AI sovereignty needs?
Managed hosting on shared infrastructure gives you an operator and usually Australian storage, with processing wherever the provider runs its models. Private cloud gives you dedicated capacity, which settles the sharing question but still depends on where the model runs and who operates it. On-premise puts the model and the documents in your own building under your own keys. Sovereignty rises in that order; so does what you have to provide.

See Dominion answering from your own documents.

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