Compare a fully loaded cloud bill against on-premises capex, power, cooling, rack space and staff on one monthly basis.
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.
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.
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.
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.
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.
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%.