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On-Premises Enterprise Search vs. VPC: Choosing Your Secure AI Architecture

Jan Overney
Post By Jan Overney September 25, 2025

For leaders in regulated industries looking to take their organization's knowledge management solutions to the next level, the question is no longer "Should we deploy AI-powered enterprise search solutions," but "How do we deploy them securely and compliantly?"

Some organizations are comfortable handling sensitive financial, client, or proprietary data within a multi-tenant cloud infrastructure. Others, meanwhile, continue to be wary of letting any sensitive data leave their own security perimeter. As a result, the conversation surrounding enterprise-grade GenAI, and more specifically, AI-powered enterprise search solutions, has settled around a spectrum of architectures designed for control and compliance.

The two primary models of choice for secure AI enterprise search solution deployments are the Virtual Private Cloud (VPC) and on-premises. Choosing between the available deployment models for enterprise GenAI platforms depends on a variety of regulatory, client, and internal risk management drivers.

This guide explores this spectrum of secure options, helping you understand the drivers for each and highlighting why finding a vendor that delivers both is a significant strategic advantage.

Understanding Key Differences between VPC and On-Premises Enterprise Search

Your organization's security and compliance needs dictate your AI architecture, not the other way around. A one-size-fits-all approach is not an option when choosing between technically sound solutions for secure cloud and on-premise environments. 

Virtual Private Cloud (VPC): The Standard for Secure Enterprise AI

For many of the world's leading financial institutions and regulated companies, a VPC has become the deployment model of choice. By creating a logically isolated section within a public cloud, a VPC provides a secure, single-tenant environment that offers significant control over network and data access. This architecture, which we’ve implemented in some of the most demanding industries, e.g., financial regulation, provides a powerful combination of enterprise security and managed infrastructure.

On-Premises: The Solution for Specific Mandates

For some organizations with specific requirements for data residency and control, on-premises enterprise search solutions remain the only viable path to AI adoption. In this architecture, all software, data, and processing reside within the organization's own data centers, satisfying non-negotiable policies that require absolute data sovereignty and physical control over the infrastructure. The challenge for many companies is that very few enterprise AI vendors cater to this deployment option. 

These Business Drivers Can Make On-Prem Enterprise Search a Requirement

The decision to demand an on-premises deployment is a strategic one, often driven by factors that go beyond technical security specifications. The most common drivers include:

  • Absolute Data Sovereignty: Certain national or industry regulations leave no ambiguity, requiring sensitive data to remain physically within a country's borders or a company's own walls.
  • Intransigent Stakeholder Policy: A company's board, CISO, or key clients may enforce a strict policy against having their most valuable data reside on any third-party infrastructure.
  • Eliminating Third-Party Risk: For the most risk-averse organizations, on-premise deployment removes the entire category of risk associated with a cloud provider's personnel, policies, or potential security breaches.

 

Foundational Capabilities for Any Secure Enterprise Search Platform

Whether deployed in a VPC or on-premises (or, for that matter, in a more complex hybrid scenario), a powerful and reliable AI-powered enterprise search platform can leverage a core set of value-adding capabilities:

Squirro: Expertise From On-Prem to VPC to Hybrid Environments

At Squirro, our philosophy has been to provide clients with the architectural flexibility to meet their unique security requirements. We have garnered deep experience deploying our secure, feature-rich enterprise GenAI platform within the VPCs of top-tier global banks and financial institutions.

But, we are also among a very select group of vendors to deliver our platform in a full on-premises deployment. Our adaptable, security-first architecture lets us deliver transformative AI, regardless of your infrastructure requirements.

Get Started Today with Secure AI-Powered Enterprise Search

Your journey into generative AI requires a partner who understands that security and flexibility are not mutually exclusive. A successful deployment is one that aligns with the specific compliance, risk, and stakeholder realities of your organization.

To explore the technical underpinnings of a secure GenAI deployment in greater detail, we invite you to download our guide.

Download our Technical Essentials Guide: Transform Banking & Financial Services with Enterprise GenAI.

This guide offers a deep dive into the practical strategies for implementing secure and effective AI, covering:

  • Deploying GenAI while ensuring PII protection and data security compliance.
  • The essential building blocks of a reliable platform, like Enhanced RAG and AI Guardrails.
  • Actionable use cases for automating tasks and enhancing decision-making in the BFSI sector.

Download the guide now to build a secure and powerful strategy for generative AI.

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