# 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.

- Interactive version: https://infikeytechnologies.com/tools/cloud-migration-cost-savings-calculator
- Type: free instant calculator
- Category: Cloud & infrastructure
- Last reviewed: 2026-10-05
- Publisher: Infikey Technologies (https://infikeytechnologies.com)

## Example result (default inputs)

| Input | Value |
| --- | --- |
| 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.

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

| Metric | Value |
| --- | --- |
| 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 running cost

| Item | Value | Detail |
| --- | --- | --- |
| On-premise | $179,400 |  |
| Cloud (after right-sizing) (selected) | $119,340 |  |

**Yearly cost by item**

| Item | On-premise | Cloud |
| --- | --- | --- |
| 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.

Open this result on the website: https://infikeytechnologies.com/tools/cloud-migration-cost-savings-calculator?currency=USD&servers=20&hardware=8000&refresh_years=5&facility=3000&admin_hours=160&hourly_cost=45&licences=25000&cloud_per_server=250&rightsizing=25&cloud_admin=60&cloud_licences=90&migration_cost=40000&years=5

## Use from a link or API

Add these query parameters to https://infikeytechnologies.com/tools/cloud-migration-cost-savings-calculator (pre-filled page), https://infikeytechnologies.com/tools/cloud-migration-cost-savings-calculator.md (this plain-text page) or https://infikeytechnologies.com/api/tools/cloud-migration-cost-savings-calculator (JSON).

| Parameter | Meaning | Accepted 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 |

- Small server room: 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
- Mid-size data centre: https://infikeytechnologies.com/tools/cloud-migration-cost-savings-calculator?currency=USD&servers=60&hardware=9000&refresh_years=5&facility=9000&admin_hours=400&hourly_cost=50&licences=80000&cloud_per_server=260&rightsizing=30&cloud_admin=60&cloud_licences=90&migration_cost=150000&years=5
- Due for hardware refresh: https://infikeytechnologies.com/tools/cloud-migration-cost-savings-calculator?currency=USD&servers=25&hardware=12000&refresh_years=4&facility=3500&admin_hours=160&hourly_cost=45&licences=25000&cloud_per_server=250&rightsizing=25&cloud_admin=60&cloud_licences=90&migration_cost=50000&years=5

## How it is calculated

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

## 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

| Approach | What it means | Cost & 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 |

## FAQ

### 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.

## Get expert help

Send these results to an Infikey Technologies specialist from the form on https://infikeytechnologies.com/tools/cloud-migration-cost-savings-calculator#estimate or via https://infikeytechnologies.com/contact.

More free calculators: https://infikeytechnologies.com/tools.md

## 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.