A hosted RAG service is the path of least resistance: sign up, point it at your documents, ship a chatbot by Friday. For many teams that is the right call. For a regulated, German-speaking enterprise, it is worth being clear-eyed about what you are trading away.
What “self-hosted” actually buys you
Three guarantees you can verify
- No data egress. Documents, vectors and metadata live in your own PostgreSQL, Redis and vector store. With local models via Ollama, nothing leaves your network — verifiable at the network layer, not just in a contract.
- No new sub-processor. Self-hosting means there is no RAGSuite processor to assess. Your personal data stays inside your existing controllership — the cleanest path to DSGVO Art. 5, 25 and 32.
- No phone-home. No telemetry, no usage beacon, no remote kill-switch. Enterprise unlocks with a signed, offline licence key — so an air-gapped instance simply works.
The cost shape is different too
Open core means no lock-in
The RAGSuite core is Apache 2.0. That is not a synonym for “free” — it means inspectable and portable. You can read the code, export your data, and leave. Open core is insurance against the day a vendor’s incentives stop matching yours.
When a cloud is genuinely fine
For the full side-by-side, see self-hosted vs. hosted RAG and the sovereignty page.
Frequently asked questions
When is a hosted cloud genuinely fine?
If you are a small team without regulated data, a hosted service is often the pragmatic choice, and standing up infrastructure is overhead you do not need. The calculus changes when data residency, audit, and the ability to prove control become first-order — which, in DACH enterprises, they usually are.
Isn't open source just 'free'?
No. Apache 2.0 means inspectable and portable. You can read the code, export your data, and leave — insurance against the day a vendor's incentives stop matching yours. 'Free' is the wrong frame; 'no lock-in' is the point.
Sources & further reading
- RAGSuite — sovereignty — the architecture
- Self-hosted vs. hosted RAG — the full side-by-side