Cloud TCO Calculator
Compare a fully loaded cloud bill against on-premises capex, power, cooling, rack space and staff on one monthly basis.
About Cloud TCO Calculator
The cloud side adds the meters you see on the invoice plus the two that never appear on it: the people who run the platform and the migration you already paid for, spread over the months it serves. The on-premises side converts capex into a monthly depreciation charge and adds the facility costs that make hardware run — power multiplied by PUE, maintenance as a percentage of capex, rack space and staff. A comparison that puts a cloud invoice next to a hardware purchase order is meaningless, because one is a monthly operating cost and the other is a multi-year asset. Normalising both to a fully loaded monthly figure is the only fair basis, and these figures are planning estimates rather than accounting or tax advice.
Formula
Cloud TCO
cloud = usage + usage × support% + FTE cost ÷ 12 + migration ÷ amortisation months; on-premises = capex ÷ (years × 12) + kW × PUE × 730 × electricity price + maintenance ÷ 12 + facilities + FTE cost ÷ 12.
- 730
- Hours in an average billed month
- PUE
- Power usage effectiveness — total facility power divided by IT power
- amortisation
- Spreading the one-off migration cost across the months it benefits
Worked example
With the default values below, Cloud TCO Calculator returns Cloud Monthly TCO of $105,470.56. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Cloud compute spendaccepts 0–20,000,000 USD/month
- 42,000 USD/month
- Cloud storage spendaccepts 0–20,000,000 USD/month
- 8,000 USD/month
- Cloud network and egress spendaccepts 0–20,000,000 USD/month
- 3,500 USD/month
- Licensing carried into the cloudaccepts 0–20,000,000 USD/month
- 6,000 USD/month
- Provider support chargeaccepts 0–20 % of spend
- 7 % of spend
- Cloud platform engineersaccepts 0–200 FTE
- 2.5 FTE
- Fully loaded cost per engineeraccepts 0–1,000,000 USD/year
- 150,000 USD/year
- One-off migration cost to amortiseaccepts 0–100,000,000 USD
- 380,000 USD
- Amortisation periodaccepts 1–120 months
- 36 months
- On-premises hardware capexaccepts 0–500,000,000 USD
- 1,800,000 USD
- Depreciation and refresh cycleaccepts 1–10 years
- 4 years
- Sustained power drawaccepts 0–10,000 kW
- 45 kW
- Data-centre PUEaccepts 1–3 ratio
- 1.7 ratio
- Electricity priceaccepts 0–2 USD/kWh
- 0.12 USD/kWh
- Rack space, cross-connects and facilitiesaccepts 0–2,000,000 USD/month
- 4,500 USD/month
- Hardware maintenance and supportaccepts 0–40 % of capex per year
- 18 % of capex per year
- On-premises infrastructure engineersaccepts 0–200 FTE
- 4 FTE
Results
- Cloud Monthly TCO
- $105,470.56
- On-Premises Monthly TCO
- $125,701.40
- Monthly Advantage to Cloud
- $20,230.84
- Advantage as a Share of On-Premises
- 16.1%
- Cloud Annual TCO
- $1,265,646.67
- On-Premises Annual TCO
- $1,508,416.80
- Provider Support Charge
- $4,165.00
- Which Model Wins
- Cloud is cheaper on this model
Step by step
- 1Values used
- 2Cloud TCO
- 3Cloud Monthly TCO= 105,470.56
- 4On-Premises Monthly TCO= 125,701.40
- 5Monthly Advantage to Cloud= 20,230.84
- 6Advantage as a Share of On-Premises= 16.1
- 7Cloud Annual TCO= 1,265,646.67
- 8On-Premises Annual TCO= 1,508,416.80
Assumptions and limits
- The result is derived only from the 17 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation or tax into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Cloud TCO calculated?
cloud = usage + usage × support% + FTE cost ÷ 12 + migration ÷ amortisation months; on-premises = capex ÷ (years × 12) + kW × PUE × 730 × electricity price + maintenance ÷ 12 + facilities + FTE cost ÷ 12. The cloud side adds the meters you see on the invoice plus the two that never appear on it: the people who run the platform and the migration you already paid for, spread over the months it serves. The on-premises side converts capex into a monthly depreciation charge and adds the facility costs that make hardware run — power multiplied by PUE, maintenance as a percentage of capex, rack space and staff.
Why does Cloud TCO matter?
A comparison that puts a cloud invoice next to a hardware purchase order is meaningless, because one is a monthly operating cost and the other is a multi-year asset. Normalising both to a fully loaded monthly figure is the only fair basis, and these figures are planning estimates rather than accounting or tax advice.
What values do I need to enter?
This calculator takes 17 inputs: Cloud compute spend, Cloud storage spend, Cloud network and egress spend, Licensing carried into the cloud, Provider support charge, Cloud platform engineers, Fully loaded cost per engineer, One-off migration cost to amortise, Amortisation period, On-premises hardware capex, Depreciation and refresh cycle, Sustained power draw, Data-centre PUE, Electricity price, Rack space, cross-connects and facilities, Hardware maintenance and support, On-premises infrastructure engineers. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.
Why multiply power by PUE?
PUE captures everything the facility burns beyond the servers themselves — cooling, UPS losses, lighting and distribution. At a PUE of 1.7 every kilowatt of IT load draws 1.7 kilowatts from the grid, so ignoring it understates the on-premises electricity bill by about 40%.
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