{
  "slug": "cloud-vs-colo-tco",
  "title": "Cloud vs Colocation TCO Calculator",
  "heading": "Cloud vs Colocation TCO Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/cloud-vs-colo-tco",
  "summary": "Compare 3-year total cost of ownership between cloud and colocated hardware.",
  "description": "Cloud vs colo comparisons usually get skewed because cloud pricing is quoted as pure opex while colo comparisons forget to include the hidden costs — hardware refresh, rack space, power, bandwidth commits, and the staff time to run it. This calculator builds both sides fully: cloud cost as a flat recurring monthly fee, and colo cost as amortized hardware capex plus monthly recurring colo fees (power, space, cross-connects) plus a fractional headcount cost for hands-on-glass and hardware lifecycle work. Over a 3-year horizon it shows total cost for each path and the crossover point. The realistic finding for most mid-size workloads is that colo wins on raw compute-per-dollar once utilization is high and stable, but the operational staff cost is what actually erases the advantage — teams that model colo without adding at least 0.25-0.5 FTE per rack routinely underestimate colo TCO by 20-40%.",
  "formula": "Cloud TCO = monthly cloud cost × 36. Colo TCO = hardware cost + (monthly colo fees + staff cost allocation) × 36.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=cloud-vs-colo-tco",
  "inputs": [
    {
      "id": "cloudMonthly",
      "label": "Equivalent cloud monthly cost",
      "kind": "number",
      "hint": null,
      "default": 18000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "hardwareCost",
      "label": "Upfront hardware cost",
      "kind": "number",
      "hint": null,
      "default": 250000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "colomonthly",
      "label": "Colo fees (power, space, network)",
      "kind": "number",
      "hint": null,
      "default": 4500,
      "unit": "$/mo",
      "min": 0,
      "max": null
    },
    {
      "id": "staffFte",
      "label": "Fractional FTE for ops",
      "kind": "number",
      "hint": null,
      "default": 0.4,
      "unit": null,
      "min": 0,
      "max": null
    },
    {
      "id": "staffCost",
      "label": "Fully loaded FTE cost",
      "kind": "number",
      "hint": null,
      "default": 160000,
      "unit": "$/yr",
      "min": 0,
      "max": null
    },
    {
      "id": "years",
      "label": "Comparison horizon",
      "kind": "number",
      "hint": null,
      "default": 3,
      "unit": "years",
      "min": 1,
      "max": 7
    }
  ],
  "outputs": [
    {
      "id": "cheaper",
      "label": "Lower TCO option",
      "format": "raw",
      "hint": null,
      "primary": true
    },
    {
      "id": "diff",
      "label": "Savings of cheaper option",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "cloudTotal",
      "label": "Total cloud cost over horizon",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "coloTotal",
      "label": "Total colo cost over horizon",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Equivalent cloud monthly cost: 18000 $",
      "Upfront hardware cost: 250000 $",
      "Colo fees (power, space, network): 4500 $/mo",
      "Fractional FTE for ops: 0.4",
      "Fully loaded FTE cost: 160000 $/yr",
      "Comparison horizon: 3 years"
    ],
    "outputs": [
      "Lower TCO option: Colocation",
      "Savings of cheaper option: $44,000",
      "Total cloud cost over horizon: $648,000",
      "Total colo cost over horizon: $604,000"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter equivalent cloud monthly cost ($).",
      "Enter upfront hardware cost ($).",
      "Enter colo fees (power, space, network) ($/mo).",
      "Enter fractional fte for ops.",
      "Enter fully loaded fte cost ($/yr).",
      "Enter comparison horizon (years).",
      "Read your lower tco option on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "cloudMonthly": 11000,
        "hardwareCost": 150000,
        "colomonthly": 2700,
        "staffFte": 0.24,
        "staffCost": 95000,
        "years": 2
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "cloudMonthly": 18000,
        "hardwareCost": 250000,
        "colomonthly": 4500,
        "staffFte": 0.4,
        "staffCost": 160000,
        "years": 3
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "cloudMonthly": 29000,
        "hardwareCost": 400000,
        "colomonthly": 7200,
        "staffFte": 0.6400000000000001,
        "staffCost": 255000,
        "years": 5
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What's usually missing from a naive colo TCO estimate?",
      "a": "Hardware refresh cycles (servers age out in 4-6 years and need replacement capex), bandwidth overage fees, spare parts inventory, and the on-call burden of hardware failures at 2 a.m. that cloud abstracts away entirely. Add a 10-15% annual maintenance/replacement reserve on top of the upfront hardware cost if your horizon exceeds the hardware's expected lifespan."
    },
    {
      "q": "Does this favor cloud or colo by default?",
      "a": "Neither — it's a straight cost comparison and the right answer depends entirely on your utilization pattern. Steady, predictable, high-utilization workloads (like a stable database tier running near 24/7) tend to favor colo or reserved cloud capacity; spiky, unpredictable, or fast-growing workloads favor cloud's elasticity even at a cost premium, because the alternative is over-provisioned idle hardware."
    },
    {
      "q": "Should I include the migration cost of moving to colo?",
      "a": "Yes, as a one-time addition to the hardware cost input if you're migrating from cloud. Data migration, rack-and-stack labor, network redesign, and the parallel-running period where you pay both cloud and colo bills typically add 5-15% to first-year colo cost and should not be ignored when judging payback time."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/cloud-vm-monthly-cost",
    "https://www.revenuelab.fyi/toolbox/reserved-vs-on-demand-savings",
    "https://www.revenuelab.fyi/toolbox/database-iops-cost"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Cloud vs Colocation TCO Calculator (https://www.revenuelab.fyi/toolbox/cloud-vs-colo-tco)"
}