![]() In this scenario, the ratios hold up from what you'll pay next month to what you'll pay over the next 5 years. In this example, we might compare rented hardware use from a neighboring company that is sharing server costs for our on-premises solution and a pay-as-you-go subscription for your Azure solution. This is the easiest comparison because you can compare like costs and any difference you see in the bill will represent a near instant return on investment at the end of the month. Scenario 1 - Monthly charges for both on-premises and Azure No worries! How would you calculate when you start seeing a return on your investment? The answer varies a bit depending on what you are currently using for on-premises and what services you ultimately use from Azure but I'll run through some scenarios that should clear this up. I hope this helps! Please let me know in the comments if you need additional clarification.Įxample used: $98,353 cost on-premises over 5 years vs $13,353 Azure cost over 5 years: That is to say that for each dollar you spent on Azure in this scenario would save $6.37 compared to your on-premises cost assuming the $98,353 on-premises cost and $13,353 Azure cost used in the example. Looking at a quick example, the total on-premises cost over 5 year(s) would be $98,353 and the total Azure cost over 5 year(s) would be $13,353. ( Total on-premises cost over 5 year(s) - Total Azure cost over 5 year(s) ) / Total Azure cost over 5 year(s) ![]() We can calculate the return on investment (ROI) with the following equation: After we've defined our workload and adjusted assumptions, we're presented with a report. The Azure Total Cost of Ownership (TCO) Calculator is a tool that estimates total on-premises and Azure costs complete with a breakdown of potential costs including hardware, software, electricity, data, networking, IT labor, and more. Still, I'll do my best to help you as I believe we can address this question using online tools. How do I calculate my ROI using the Azure Total Cost of Ownership (TCO) Calculator?Īs a disclaimer, we focus on technical questions on Q&A so reaching out to Azure Sales may better provide information about calculating ROI. The calculator automatically comes up with an estimated number of what you're probably spending on these workloads.Hello, Mohammed Irfan Gulam Rasool Shaikh ! What you need to do is just to list your on-premises workloads and their configuration. You don't have to specify each one of them individually. This calculator, as I mentioned, takes into account on-premises expenses, such as, computing hardware you purchase, electricity, cooling, physical security, and other such tangential costs. So if you are considering moving to the cloud, this will give you a clear picture of if the move is going to be economical for you. The primary role of the TCO calculator is to compare the cost of running workloads on-premises versus in Azure. The main difference between this and the pricing calculator is that this takes tangential costs into account. To predict costs, we also have something called the Total Cost of Ownership calculator referred to as the TCO calculator, in short.
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