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What Does It Cost to Move to the Cloud?

The cost of migrating to the cloud depends upon several factors. There are significant savings for certain workloads. Read more to see where you can save money and what it will cost to migrate your data.

Cloud Migration Considerations

To determine the migration cost of moving to the cloud, Strategic SaaS will take into account several factors, including:

  • The number of users
  • The amount of data to be migrated
  • “Plumbing” — how will your internal systems, if any, communicate with cloud systems
  • The dependent systems of the migration — from accounting programs to printers, what will be impacted by the migration
  • The amount of internet bandwidth required— how much data will you need to pass through your connection at the same time

Related: How Do I Move to the Cloud?

Elements in a Cost Comparison:  On Premises Vs. Cloud

There are certainly many cost savings that can occur in a pay-as-you-go cloud solution versus an install-and-own on premises solution. The shift from capital investment to operational expenses is often attractive. In particular small organizations and start-ups face much lower infrastructure costs than were necessary pre-cloud.  The cloud allows companies to use the resources and expertise of cloud hosting experts, pay only for what they use, and realize potential cost benefits throughout the year.

Larger organizations recognize financial savings and an improved operational model.  Much of the integration of services is out-of-the-box with Office 365 which makes for huge cost savings and improved productivity and communication.

The table below shows the shift in expenses when a company moves to the cloud.

On premises Cloud
Licensing Server and CAL licenses Per user, per month
IT Support Help desk and admin staff Microsoft support 24/7
Infrastructure Local or hosted data center Microsoft data centers
Hardware Upgrades About every 3 to 4 years Microsoft includes with licensing
Software Upgrades Version upgrades and patching required Microsoft includes with licensing

Real-World Examples

As you can see, giving a quick price quote for moving to the cloud is challenging due to the variety of factors involved.  Perhaps one way to illustrate the variance in cost would be to provide some real-world examples from our current clients.

Example One: Move AD to Azure, away from hosting provider. 400 end users.

On premises Cloud
Licensing $15,600/year $8,400/year
IT Support No changes No changes
Hardware Upgrades $5,600/year Included
Software Upgrades Included Included

Migration cost varies with strategy and environment.
Ongoing net cost savings with cloud is $12,800 per year/$64,000 over 5 years.

Example Two: Move 650GB of content from a file server to SharePoint Online. 50 users.

On premises Cloud
Licensing & Infrastructure 6,000/year Included*
Backup & Storage 7,200/year Included
IT Support 12,000/year 6,000/year
Hardware Upgrades 5,000/year Included
Software Upgrades Included Included

Migration cost varies based on strategy, metadata and security profile
Ongoing net cost savings with cloud is $24,200 per year/$121,000 over 5 years.
*Customer already had Office 365 and 1TB of storage available so their licensing costs did not change.

Example Three: Migrate 2,000 mailboxes and 50 public folders from existing Exchange 2007 and 2013 environments. This real world example shows how much you can save over a 6 year period via graphs and tables. Strategic SaaS performs this kind of analysis to help our customers rationalize moving to the cloud.

A summary of cost savings you can expect:


Microsoft Software and Services
3rd Party Software and Services
Deployment and Migration
Total Annual Cost for 6 years
Total Annual Code per User
Average Monthly Cost per User
% difference versus On-premises
On premises
US$ 60,480
US$ 124,051
US$ 86,400
US$ 292,946
US$ 49,025
US$ 612,902
US$ 437.79
US$ 36.48
Office 365
US$ 14,733
US$ 103,075
US$ 54,600
US$ 242,248
US$ 17,021
US$ 431,676
US$ 308.34
US$ 25.70

As you can see, computing the cost savings of moving to the cloud can be complex. Let Strategic SaaS calculate your costs and return on investment on moving to the cloud.

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