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What You Will Learn
Intermediate
- How to compare cloud vs on-premises costs
- Total Cost of Ownership (TCO)
- When each makes financial sense
| Cost Type | On-Premises | Cloud |
|---|---|---|
| Upfront (CapEx) | High — buy servers | Zero |
| Ongoing (OpEx) | Low — electricity, cooling | Pay per use |
| Scaling | Buy more servers (weeks) | Scale in minutes |
| Idle capacity | Wasted when idle | Pay only when used |
| Maintenance | You pay for IT staff | Provider handles it |
When is on-premises cheaper?
When you run at 100% capacity 24/7 for years. Cloud is cheaper for variable workloads, startups, and most businesses.Practical Exercise
Use the AWS Pricing Calculator for a 2-CPU 4GB server
Compare the monthly cost to buying a similar server
Factor in electricity, cooling, and IT staff time
Key Takeaways
- Cloud: low upfront, pay per use, elastic.
- On-premises: high upfront, fixed capacity, you maintain.
- Cloud is cheaper for variable workloads.
- On-premises can be cheaper for constant 100% utilization.
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