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+# ADR-0005 · Sovereignty over hyperscaler convenience
+
+**Status**: accepted
+**Date**: 2026-05
+
+## Context
+
+The dominant business model for video forensics SaaS (Verkada, Rhombus, Eagle Eye Networks) is: cameras stream to vendor cloud, AI runs in vendor cloud, customer pays per camera per month. This has clear commercial advantages — scaling is the vendor's problem, customer just buys cameras.
+
+However:
+
+- **CLOUD Act exposure**: any video stored in a US-jurisdiction cloud is subject to US warrants, regardless of customer location.
+- **GDPR Art. 28-30 problems**: video of EU citizens transferred to US cloud requires SCC + supplementary measures, and after Schrems II this is shaky.
+- **Argentina AAIP / EU regulators** trending toward localization requirements for sensitive video.
+- **Bandwidth cost**: streaming raw video to cloud is expensive. Edge AI eliminates most of it.
+- **Vendor lock-in** is severe — exporting from Verkada means losing all your historical tags.
+
+## Decision
+
+Blocao runs **on customer-owned infrastructure**. The hub itself, when used, runs on **EU sovereign bare-metal** (Hetzner Falkenstein/Helsinki, with optional OVH replica in Germany/France). No hyperscaler dependency in the critical path.
+
+Three storage tiers:
+
+1. **Raw video**: stays at the site, on the Cell's encrypted disk. Never leaves.
+2. **Embeddings + metadata**: bridged to operator-run hub via MQTT.
+3. **Evidence packs**: when explicitly exported, encrypted with customer-held keys (BYOK).
+
+Self-hosted infrastructure: MinIO (S3 API), Qdrant (vector DB), TimescaleDB (time-series), Mosquitto (broker), Caddy (TLS), Keycloak (auth).
+
+Cost analysis (50-100 sites, 500-1000 cameras):
+
+| Setup | Monthly cost |
+|---|---|
+| AWS reference (S3 + RDS + EC2 + Kinesis + Rekognition) | €8,000 - 15,000 |
+| Hetzner bare-metal self-hosted | €800 - 1,500 |
+
+The 10× cost saving is structural, not a temporary discount.
+
+## Consequences
+
+**Good**:
+- Sovereignty becomes a sellable feature, not a compliance afterthought.
+- Margin economics work better at all scales.
+- Customers can self-host the hub if they want — opens partner channels.
+- AAIP / GDPR audits become easy: show the topology, show the policies, done.
+
+**Bad / trade-offs**:
+- We carry operational responsibility (or our partners do). Hyperscaler abstracts this.
+- Hetzner has had outages. We design for two regions to mitigate.
+- "Self-hosted" historically connoted "harder to use" — the UX has to be exceptional to overcome that.
+
+## Alternatives considered
+
+- **AWS reference architecture**: cheaper to build, structurally more expensive to operate, sovereignty is impossible.
+- **Multi-cloud abstraction**: complexity tax for no real benefit when 95% of customers don't care which cloud.
+- **Customer-owned cloud (BYOC) on AWS**: better than vendor cloud, but still hyperscaler. Acceptable as a non-default option.