Cloud Migration ROI Calculator

Cloud migration ROI turns on three things: the gap between on-premises and cloud running costs, the one-off cost of moving, and whatever productivity the new setup releases. Published savings figures vary enormously by workload and by who is publishing them, and vendor material tends toward the optimistic end, so the numbers worth entering are the ones from an actual bill and an actual quote rather than a headline percentage.

200k current on-prem annual cost, 130k cloud annual cost after migration = 70k annual savings. Plus 30k productivity gains = 100k total annual benefit. 150k one-off migration cost. Over 3 years: 300k total savings, net 150k, ROI 100%. Payback in 1.5 years.

Migration overruns usually come from underestimating the one-off cost rather than overestimating the savings. Cloud running costs can exceed on-premises costs for steady, predictable workloads, since cloud pricing is built around elasticity that a flat workload never uses. Savings also tend to arrive late: reserved capacity, right-sizing and refactoring all take time, so a first-year figure often understates what the same estate looks like in year two or three.

Quick example

With current infra cost annual of 200,000 and cloud cost annual of 130,000 (plus migration one-off cost of 150,000 and productivity gains annual of 30,000), the result is 100.00%.

Which inputs matter most

Migration One-off Cost carries more weight than its size suggests, because it sits in both the numerator and the denominator. At the defaults, a 10% higher migration bill drops ROI from 100% to 81.8%, while a 10% higher Cloud Cost Annual drops it to 74% and a 10% higher Current Infra Cost Annual lifts it to 140%. Analysis Period has the largest single effect of all, because the benefit repeats each year while the migration cost is paid once: extending three years to four takes ROI from 100% to 166.7%. Productivity Gains Annual moves it least, adding 6 points for a 10% increase, which is worth knowing given it is the hardest input to evidence.

What's happening under the hood

Annual benefit is the on-premises cost minus the cloud cost plus the productivity gains. Total savings is that benefit multiplied by the analysis period, net value is total savings minus the one-off migration cost, and ROI is net value divided by the migration cost. Payback, shown separately, is the migration cost divided by the annual benefit, which is 1.5 years at the defaults and is where ROI crosses zero.