Calculator
Cloud vs on-prem TCO
Compare the total cost of running on your own hardware against the cloud over several years, and see when one overtakes the other.
On-premises
Refresh cycle
Cloud
At list price
Reserved / savings plans
Assumptions
Over 5 years
Cloud is $454,000 cheaper
That's 26% less. It is ahead from the first month.
Where the money goes
| Cost | On-prem | Cloud |
|---|---|---|
| Hardware | $240,000 | – |
| Power, cooling, space | $180,000 | – |
| Support & licences | $144,000 | – |
| Cloud bill | – | $630,000 |
| Migration | – | $80,000 |
| Operations staff | $1,200,000 | $600,000 |
| Total | $1,764,000 | $1,310,000 |
How this is calculated
Costs are added up month by month. On-prem buys all hardware up front and again at the end of each refresh cycle, then pays monthly for power, cooling and space, a yearly support contract as a percentage of the hardware price, and the people who run it. Cloud pays a one-off migration cost, then the monthly bill minus any commitment discount, plus its own operations staff.
What it leaves out
- Data egress, which can be a large part of a cloud bill for data-heavy workloads.
- Resale value of old hardware, and the cost of capital tied up in it.
- Idle capacity: on-prem must be sized for peak load, the cloud can scale down.
- Opportunity cost: what your team could build instead of running infrastructure.
Treat the result as a starting point for a conversation, not a final answer. The point is to make the assumptions visible so you can argue about the right things.