Cloud & infrastructure · Free tool

Cloud migration cost calculator: on-premise vs cloud savings and payback

Cloud migration saves money when the yearly cost of owning servers — hardware spread over its refresh cycle, data centre space, power, admin time and licences — is higher than the cloud bill plus cloud operations. Right-sizing, auto-scaling and switching off idle environments usually cut the cloud bill well below a like-for-like copy of your servers. The payback period is the one-off migration cost divided by the yearly saving.

Free, no sign-up · By Infikey Technologies · Updated

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Your numbers

Reset
$

Include storage and networking share.

years
$
$
$
$

Compute, storage, backup and network for one like-for-like server. Check your provider’s pricing calculator.

%

Smaller instances, reserved pricing, switching off idle environments.

%
%
$

Example value — replace with your own quote.

Result

Saving per year

$60,060

On-premise costs about $179,400 a year and cloud about $119,340, a saving of $60,060 a year.

Strong case: the migration pays for itself in about 8 months.

Yearly running cost
  • On-premise $179,400
  • Cloud (after right-sizing) $119,340
Cloud migration cost savings calculator results
On-premise cost per year $179,400
Cloud cost per year $119,340
Saving per year $60,060
Payback period 8 months
Net saving over 5 years (after migration) $260,300

Yearly cost by item

ItemOn-premiseCloud
Hardware & data centre / cloud hosting$68,000$45,000
Admin time$86,400$51,840
Licences & support$25,000$22,500
Total$179,400$119,340
  • Estimates assume a like-for-like move. Re-architecting for managed services (databases, containers, serverless) can lower running costs further but raises the one-off cost.

Estimates for planning only, not professional advice. Infikey Technologies accepts no liability for decisions based on these results — read the disclaimer.

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How this calculator works

MetricFormula
On-premise per yearservers × hardware ÷ refresh years + facility × 12 + admin hours × rate × 12 + licences
Cloud per yearservers × cloud cost × 12 × (1 − right-sizing %) + admin × cloud admin % + licences × cloud licence %
Payback (months)migration cost ÷ (yearly saving ÷ 12)

Worked example

With these inputs:

  • Currency: USD ($)
  • Servers (physical or VMs): 20
  • Hardware cost per server: 8,000
  • Hardware refresh cycle: 5 years
  • Data centre, power & cooling per month: 3,000
  • Admin hours on infrastructure per month: 160
  • Loaded cost per admin hour: 45
  • Software licences & support per year: 25,000
  • Cloud cost per equivalent server per month: 250
  • Saving from right-sizing & auto-scaling: 25%
  • Admin hours in the cloud vs today: 60%
  • Licence cost in the cloud vs today: 90%
  • One-off migration cost: 40,000
  • Years to compare: 5

Saving per year: $60,060. On-premise costs about $179,400 a year and cloud about $119,340, a saving of $60,060 a year.

On-premise cost per year$179,400
Cloud cost per year$119,340
Saving per year$60,060
Payback period8 months
Net saving over 5 years (after migration)$260,300

Open this example in the calculator

Where cloud savings come from

  • No hardware purchases or refresh cycles — capacity is rented as needed.
  • Right-sizing: most on-premise servers run far below capacity; cloud instances can match real load.
  • Auto-scaling and scheduling: scale down at night and switch off test environments when idle.
  • Reserved or committed-use pricing for steady workloads.
  • Less time spent on hardware, patching hypervisors and data centre work.

Costs that surprise teams after migrating

  • Data transfer out of the cloud (egress) and between regions.
  • Over-provisioned instances copied directly from old servers.
  • Forgotten resources: unattached disks, old snapshots and idle environments.
  • Licences that cost more in the cloud, or that cannot move at all.

Migration approaches

ApproachWhat it meansCost & speed
Rehost (lift and shift) Move servers as they are Fastest and cheapest to move; smallest savings
Replatform Swap parts for managed services (e.g. managed database) Moderate effort; better savings and less admin
Refactor Redesign for containers or serverless Highest effort; lowest running cost and best scalability
Retire / replace Switch off or replace with SaaS Often the biggest saving of all

Every option can be set in the web address, so you can bookmark a scenario or send it to a colleague. AI assistants such as ChatGPT, Gemini, Claude and Perplexity can use the same parameters to open this calculator with your numbers and the result already on the page.

ParameterWhat it setsAccepted values
currency Currency one of USD, INR, AED, GBP, EUR
servers Servers (physical or VMs) number from 1 to 100000, default 20
hardware Hardware cost per server number from 0 to 10000000 (in the chosen currency), default 8000
refresh_years Hardware refresh cycle number from 1 to 10 (years), default 5
facility Data centre, power & cooling per month number from 0 to 100000000 (in the chosen currency), default 3000
admin_hours Admin hours on infrastructure per month number from 0 to 100000, default 160
hourly_cost Loaded cost per admin hour number from 0 to 10000 (in the chosen currency), default 45
licences Software licences & support per year number from 0 to 1000000000 (in the chosen currency), default 25000
cloud_per_server Cloud cost per equivalent server per month number from 0 to 1000000 (in the chosen currency), default 250
rightsizing Saving from right-sizing & auto-scaling number from 0 to 80 (%), default 25
cloud_admin Admin hours in the cloud vs today number from 0 to 200 (%), default 60
cloud_licences Licence cost in the cloud vs today number from 0 to 300 (%), default 90
migration_cost One-off migration cost number from 0 to 1000000000 (in the chosen currency), default 40000
years Years to compare number from 1 to 10, default 5

Example: https://infikeytechnologies.com/tools/cloud-migration-cost-savings-calculator?currency=USD&servers=6&hardware=6000&refresh_years=5&facility=600&admin_hours=40&hourly_cost=40&licences=6000&cloud_per_server=180&rightsizing=30&cloud_admin=60&cloud_licences=90&migration_cost=12000&years=5

Also available as plain text for AI assistants and a free JSON API (OpenAPI spec).

Last reviewed by the Infikey Technologies team.

Disclaimer

This calculator is provided free for general information and planning only. Results are estimates based on the inputs you enter and the assumptions described on this page, reference data such as published prices may change, and actual costs and outcomes will differ. Nothing on this page is financial, legal, tax, investment or other professional advice. Infikey Technologies Private Limited, Infikey Technologies LLC and their directors, employees and affiliates make no warranty, express or implied, about the accuracy, completeness or suitability of this tool or its results, and accept no liability for any loss or damage, direct or indirect, arising from its use or from reliance on its results. Verify all figures independently and seek professional advice before making any decision. Use of this tool is at your own risk.

FAQ

Cloud migration cost savings calculator questions

Does moving to the cloud save money? +

Often, but not always. Savings come from right-sizing, auto-scaling and less admin work. A like-for-like copy of over-sized servers can cost more than running them yourself.

How much does a cloud migration cost? +

It depends on the number of applications, how much is re-architected, data volume and downtime limits. Enter your own quote in the calculator to see the payback.

What is cloud right-sizing? +

Choosing instance sizes that match real usage rather than the size of the old server, and adjusting them as load changes.

What hidden costs does the cloud have? +

Data egress, idle resources, premium support plans and some licences. Tagging and monthly cost reviews keep them under control.

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