What does NOT migrating your applications to the cloud really cost?
The right question is not “how much does migrating cost?” but “how much does staying where we are cost us?”.
They are asking the wrong question
In many boardrooms, cloud migration is discussed as an expense: the cost of migrating is compared against a zero cost of staying. That zero is an illusion.
Keeping your own infrastructure, or a poorly managed cloud, has a real and growing cost spread across several budget lines, so it rarely shows up consolidated.
According to EMA Research (2024), the average cost of unplanned downtime is $14,056 USD per minute. A multi-hour outage in a critical system can exceed a mid-size company’s monthly IT budget.
The cost iceberg of the status quo
Visible costs
- Server and network hardware
- Software and OS licenses
- Vendor support contracts
- Connectivity and bandwidth
Underestimated costs
- Power and cooling
- Staff dedicated to maintenance
- Unplanned downtime
- Physical space and security
Rarely calculated costs
- Technical debt in legacy systems
- Risk from unsupported hardware
- Opportunity cost of projects not done
Strategic costs
- Talent that prefers modern stacks
- Limited time-to-market
- Inability to scale for sudden demand
Estimated on-premise TCO: mid-size company in Mexico
Illustrative example for 150–300 employees and 15–20 servers. Values are indicative; the calculation depends on your context.
| Category | Components | MXN / year |
|---|---|---|
| Hardware (depreciation) | Servers, storage, networking, UPS; 4-year depreciation. | $480,000 – $960,000 |
| Electricity | Servers, cooling and UPS; industrial tariff. | $180,000 – $360,000 |
| Software licenses | OS, virtualization, DB, backup, monitoring, security. | $240,000 – $600,000 |
| Operations staff | 1–2 infrastructure administrators (partial). | $480,000 – $900,000 |
| Unplanned downtime | Lost productivity at 99.0–99.5% availability. | $200,000 – $800,000 |
| Security and compliance | Antivirus, firewall, SIEM, updates, audits. | $120,000 – $300,000 |
| Maintenance and support | Vendor contracts, spare parts, external support. | $100,000 – $240,000 |
| Estimated total annual cost | $1.8M – $4.2M | |
Indicative estimates; they exclude strategic and opportunity costs.
Calculate your cost of inaction
Use the results as a starting point for the conversation with your CFO. These are indicative estimates.
On-premise vs. cloud
| Dimension | On-premise | Cloud |
|---|---|---|
| Upfront investment (CAPEX) | High: hardware, licenses, installation | Minimal: OPEX model, pay per use |
| Availability | Typically 99.0%–99.5%; depends on your team | 99.9%–99.99% with contractual SLA |
| Scalability | Slow: purchase, installation, configuration | In minutes, no upfront investment |
| Security | High if invested in; full customer responsibility | Shared-responsibility model |
| Control and customization | Maximum | High, within provider limits |
| IT team workload | High: maintenance, patching, hardware | Low at the infrastructure layer |
When on-premise does make sense
The cloud is not the answer to everything. With very stable high-volume workloads, data-sovereignty requirements or recent investments still being amortized, a hybrid model or keeping what exists may be right.
A good advisor should tell you that just as honestly.
How to take it to your CFO
Turn CAPEX into predictable OPEX, quantify risk as a contingent liability, show the return in business speed and use real data (energy bills, salaries, incidents, renewals) instead of intuition.
Shall we run the numbers with your company’s real data?
We offer a diagnosis of your applications’ infrastructure, with TCO analysis and migration roadmap, and the option to run them under an AMS service with or without hosting.
Let’s talk about your project
Tell us what you need and a specialist will contact you within 1 business day.
- Phone
+52 (55) 5386 5595 - Office
Roma Norte, Mexico City - Hours
Monday to Friday, 9:00 to 18:00 (GMT-6)