n8n self hosted vs cloud: which should you run?

n8n Cloud is n8n run for you: it is hosted in Frankfurt, updated through a console, and billed by monthly executions, from 20 € a month billed annually for 2,500 executions. Self-hosted n8n Community edition costs nothing in licence fees for internal business use and includes almost every feature, but you run the server, the database, the updates and the backups. Choose Cloud when nobody on your team will look after a server; self-host when data must stay on your own infrastructure, volume is high, or you need full control.

Our n8n integration page covers what we connect n8n to. This post covers the hosting decision.

What does the Sustainable Use License allow?

Self-hosted n8n is distributed under n8n's own Sustainable Use License, a fair-code licence. n8n does not call it open source. The licence lets you use and modify the software "only for your own internal business purposes or for non-commercial or personal use". The licence does not apply to n8n Cloud, which has its own subscription terms.

n8n's licence FAQ is specific about what that means.

You can: - Run your own business processes on it, on as many instances as you like. - Build automations for clients on your instance, as long as the clients cannot create or edit them. - Charge for building, setting up and maintaining workflows, and for training and consultancy. - Use n8n behind the scenes in your own product, where users trigger workflows you built.

You cannot: - Host n8n as a service where clients build their own workflows. - Let outside users build or configure workflows through your product, whether by a custom screen, the n8n API, MCP or an AI agent acting for them. - Fork n8n to launch your own automation product, or white-label it. - Use the key-gated enterprise features without a paid licence.

For most small and mid-size businesses automating their own work, the licence is not a constraint. If you sell software and n8n is part of it, read the FAQ or email n8n before you build.

Community, Business or Cloud: what do you get?

The editions page lists what Community edition leaves out: custom variables, environments, external secrets, external storage for binary data, log streaming, multi-main mode, projects, SSO, Git version control, and sharing. The last one matters most for a team: on Community, only the instance owner and the person who created a workflow or credential can open it. Registering your instance with an email address, which is free, adds folders, debug in editor and custom execution data.

n8n calls its pricing page the source of truth for features, and plans change, so check it the week you decide.

What does hosting n8n yourself involve?

The install is the easy part: n8n documents a one-line setup, Docker and Docker Compose. The work is keeping it healthy for years.

1. Choose the database and HTTPS. n8n uses SQLite by default; for production we use PostgreSQL, with HTTPS in front.
2. Protect the encryption key. n8n encrypts stored credentials with a key kept in the .n8n folder. A full backup is that folder plus the database. Restore the database without the key and every credential is unreadable.
3. Back up on a schedule and test the restore. n8n's CLI export saves workflows and credentials only, not users, execution history, variables or settings, so it does not replace a full backup.
4. Update at least once a month, as n8n's docs advise, after reading the release notes and trying the update on a test instance. Take a full backup first.
5. Plan for scale. Queue mode splits n8n into a main instance that receives triggers and webhooks, a Redis queue, and workers that run the executions. One catch: n8n does not support queue mode with files stored on the local disk, and S3 storage is not in Community edition, so file-heavy workflows need thought.
6. Watch for failures. An error workflow that alerts a person when any execution fails, and someone who reads the alerts.

If that list has no owner in your company, Cloud is the safer choice.

Where is your data stored?

On n8n's hosted plans, n8n says data "is stored within the EU, on servers located in Frankfurt, Germany". Self-hosted, it sits wherever you run the server: a UK cloud region, an Indian data centre or a machine in your office.

Two points UK and EU readers often miss. First, the n8n instance is only one stop: a node that calls an AI model, a CRM or an email service sends data to that provider, wherever it runs. Map each workflow's data path, not just the server. Second, execution logs keep a copy of the data each run handled, so set how long successful runs are saved.

If UK GDPR, GDPR or India's DPDP Act 2023 applies to you, check the hosting location with your data protection adviser. This is general information, not legal advice.

Which should you choose?

• Cloud if you have no one to run a server, volume is modest, and Frankfurt suits your data.
• Self-hosted Community if the data must stay on your infrastructure or in a specific country, workflows run often, and you have a technical owner.
• Self-hosted Business if you also need SSO, Git, separate test and production environments, or shared credentials across a team.

For how n8n compares with the hosted-only tools, read n8n vs Zapier vs Make.

Get it set up properly

Our n8n integrations service sets up either option. For self-hosting, that means PostgreSQL, HTTPS, the encryption key stored off the server, scheduled backups, a test instance and upgrades tried there first. If you are deciding between Cloud and your own server, tell us your volume and where your data must live, and we will recommend one. Book a consultation.