- Cloud Networking
The Guide to Meraki Switches for Small Business Networks
30 Aug, 2025
Free Tool
Cloud ROI Calculator
Compare the 3-year total cost of ownership between on-premise servers and Microsoft Azure. Factor in hardware, energy, staff time, licensing, and depreciation to see your true return on investment.
Your Current Infrastructure
Include warranties, spare parts, repair contracts
Server power + cooling costs (estimate £500–800/server/year)
Hours spent on patching, monitoring, backups, hardware issues
Fully loaded cost (salary + NI + pension + benefits ÷ hours)
Windows Server, SQL Server, antivirus, backup software
Leave blank to auto-estimate from server count (~£150/server/mo)
Typical On-Premise vs Cloud Costs by Business Size
| Business Size | Servers | On-Prem Annual | Azure Annual | Typical Saving |
|---|---|---|---|---|
| Small (10–25 staff) | 2–3 | £15,000–25,000 | £8,000–15,000 | 25–40% |
| Medium (25–50 staff) | 4–8 | £30,000–60,000 | £18,000–40,000 | 30–45% |
| Mid-Market (50–100 staff) | 8–15 | £60,000–120,000 | £35,000–75,000 | 30–40% |
| Large (100–250 staff) | 15–30 | £120,000–250,000 | £70,000–160,000 | 35–45% |
| Enterprise (250+ staff) | 30+ | £250,000+ | £140,000+ | 35–50% |
On-premise costs include hardware depreciation, maintenance, energy, cooling, software licensing, and estimated staff time. Azure costs are based on typical workload profiles with pay-as-you-go pricing. Reserved instances provide additional savings. All figures exclude VAT. View our Azure solutions
More Free Tools
Try our other free Azure cloud calculators and IT planning tools.
Frequently asked questions
Over a 3-year period, Azure is often cheaper once hardware refresh cycles, energy costs, physical space, and IT staff time for maintenance are factored in, though the comparison depends heavily on workload type and existing infrastructure age. On-premise can still work out cheaper for stable, predictable workloads with hardware already paid off.
A fair comparison includes hardware purchase and refresh cycles, software licensing, energy and cooling, physical space, backup and disaster recovery infrastructure, and staff time spent on maintenance for on-premise — versus subscription or consumption costs, reduced maintenance overhead, and built-in redundancy for cloud.
Many UK SMEs see a payback period of 18 to 36 months on cloud migration once reduced hardware refresh costs, lower energy bills, and decreased IT staff maintenance time are accounted for. Businesses with ageing on-premise servers nearing replacement tend to see faster payback than those with recently purchased hardware.
Ongoing risks include unplanned hardware failure requiring emergency replacement, rising energy costs for running a server room, and the growing difficulty of finding staff experienced with ageing on-premise systems. This calculator compares 3-year total cost of ownership across hardware, licensing, energy, and staff to surface these often-overlooked costs.