Is on-premise cheaper than cloud over 3 years?

For predictable, large workloads, on-premise can be 30-50% cheaper over 3 years. The cloud wins for: variable workloads, startups without capital, teams needing managed services, and global distribution.

What TCO factors favor cloud over on-premise?

Cloud advantages in TCO: no hardware refresh risk, no over-provisioning (pay for what you use), operational agility, managed security patching, no facility/power/cooling costs, and elastic scaling.

What is the typical break-even for cloud vs on-premise?

Organizations spending >$100K/month on cloud often find on-premise or colo to be cheaper at that scale. Below $50K/month, cloud's operational benefits typically outweigh the cost premium.

On-Premise vs Cloud 3-Year TCO Calculator

Calculate the 3-year Total Cost of Ownership for on-premise infrastructure vs equivalent cloud hosting. Include hardware, power, facilities, staff, and cloud OPEX.

AI & SaaS Tools

SaaS Metrics

AI Compute

AI ROI

LTV:CAC Ratio

ARPU ($/month)

Monthly Churn %

CAC ($)

Gross Margin %

LTV

$3500

LTV:CAC

11.67

Payback

2.9 mo

Health

Healthy ✓

Benchmark: LTV:CAC ≥ 3 is healthy. Payback under 12 months is excellent. Under 1 means you lose money on each customer.

How to Use

Enter the values for the scenario you are assessing. Calculate the 3-year Total Cost of Ownership for on-premise infrastructure vs equivalent cloud hosting. Include hardware, power, facilities, staff, and cloud OPEX. Use the on-prem vs cloud tco result to inform your calculation.

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On-Premise vs Cloud 3-Year TCO Calculator

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Frequently Asked Questions

Is on-premise cheaper than cloud over 3 years?

What TCO factors favor cloud over on-premise?

What is the typical break-even for cloud vs on-premise?