A per-user subscription price is not yet a five-year calculation. Comparing private cloud and Software as a Service (SaaS) for a midsize business requires migration, operations, backup and working time on both sides. A self-operated platform needs hardware and care. A SaaS service also needs administration, data migration, a tested recovery strategy and contractual clarification. Numbers become a useful comparison only once the task is defined.
The published DAXS overview of cloud, on-premises and hybrid explains the operating models. Here we examine the reproducible cost calculation for 20, 50 and 100 people. Private cloud means an environment for one organisation’s exclusive use; NIST allows it to run in-house or with a provider. SaaS means using a provided application. These terms alone establish neither equal functionality nor equal liability or availability.
First define the common scope
The fictional business needs file synchronisation, internal and external sharing, version history, joint editing of simple text documents, role-based access and documented recovery. Storage and usage assumptions per person are equal; data growth is checked separately later. The private option includes a self-operated collaboration platform and document service on dedicated hardware in a data centre. The SaaS option includes a hypothetical subscription with the stated minimum functions. Both include separate backup costs and two restore exercises each year.
This scope is no assertion that specific products are functionally equivalent. Before deciding, test concurrent editing, file formats, guest access, mobile use, identity integration, logging, accessibility and export. If a mandatory function fails, the cheaper table row is not a suitable offer. For the private option, Nextcloud documentation shows that backup needs the database as well as data and configuration; a document service requires its own integration and configuration. Specific product selection and licensing terms remain open in this fictional model.
Put every assumption on the table
All amounts are freely chosen, rounded calculation assumptions in net euros, not vendor prices, a DAXS quote or a forecast. The internal fully loaded rate is €80 per hour. Prices and wages stay constant for five years; inflation, taxes, financing, residual value, hardware replacement after year five and extra consumption from data growth are excluded. Hardware is paid for initially and used throughout the period. Neither option includes a second site or high-availability commitment.
| Cost block | SaaS | Private cloud |
|---|---|---|
| One-off migration | 30 hours initial setup × €80 plus 1.5 hours per person × €80 | 60 hours platform setup × €80 plus the same 1.5 hours per person × €80 |
| Initial hardware | €0 on the customer side | 20 / 50 / 100 people: 6,000 / 9,000 / €14,000 |
| Subscription or user-based licence | €15 per person per month | €3 per person per month for assumed software/support rights |
| Backup | €3 per person per month extra | Offsite storage 80 / 140 / €250 per month |
| Ongoing operations | 2 / 3 / 5 administration hours per month × €80 | 6 / 8 / 12 administration hours per month × €80 |
| Restore exercises | 2 × 8 hours per year × €80 | 2 × (8 / 8 / 12) hours per year × €80 |
| Further private operating costs | Included in the assumed subscription; the business’s network connection is excluded on both sides | Colocation 180 / 180 / €300, power 120 / 180 / €280, site network 100 / 100 / €150, platform support 80 / 120 / €180 and maintenance reserve 100 / 120 / €180 per month |
Slash-separated figures always mean 20 / 50 / 100 people. The private maintenance reserve is a budget for replacements and minor repairs, not guaranteed vendor cover. For SaaS, hosting, data-centre power and platform hardware are included in the assumed subscription, so they are not charged again as a separate customer bill. The common internet connection and endpoints stay outside both calculations. A real quote must clarify what subscription, backup, support and export actually include.
Results for three and five years
Every field uses the formula: Total cost = one-off setup + annual costs × number of years. For SaaS, annual costs are 12 × users × (€15 subscription + €3 backup) + 12 × monthly administration hours × €80 + 2 × 8 hours restore exercise × €80. The private environment adds €4,800 platform setup and €120 migration per person to initial hardware. Annual costs comprise twelve months of colocation, power, site networking, offsite backup, support and maintenance reserve, plus user-based licensing, administration time and restore exercises.
| People / option | One-off | Annual | 3 years | 5 years |
|---|---|---|---|---|
| 20 · SaaS | €4,800 | €7,520 | €27,360 | €42,400 |
| 20 · Private cloud | €13,200 | €15,680 | €60,240 | €91,600 |
| 50 · SaaS | €8,400 | €14,960 | €53,280 | €83,200 |
| 50 · Private cloud | €19,800 | €20,840 | €82,320 | €124,000 |
| 100 · SaaS | €14,400 | €27,680 | €97,440 | €152,800 |
| 100 · Private cloud | €30,800 | €33,120 | €130,160 | €196,400 |
Check the middle row: 50 SaaS users cost €2,400 initial setup + 50 × €120 migration = €8,400 once. Annually, 50 × €18 × 12 = €10,800 covers subscription and backup, 3 × 12 × 80 = €2,880 administration and 2 × 8 × 80 = €1,280 exercises. That gives €14,960 annually and 8,400 + 5 × 14,960 = €83,200 over five years. The private 50-person environment starts at 9,000 + 4,800 + 6,000 = €19,800. Annual blocks total €20,840, giving €124,000 over five years.
Which change shifts the comparison?
If only the assumed SaaS subscription rises by €5 per person per month, five-year costs increase by €6,000 for 20, €15,000 for 50 and €30,000 for 100 people. For 100 people, the model becomes €182,800 rather than €152,800. The private 100-person option stays at €196,400 under constant assumptions. An additional SaaS increase over the baseline of around 7.€27 per person per month across all five years would equalise the two 100-person figures; this is a threshold in the example’s arithmetic, not a price forecast. More hardware, a second site, higher electricity costs or more operating hours would likewise change the private option. Data growth can cause extra cost on both sides.
Send the same checklist with quote requests: active and external users, storage and annual growth, required office formats, versioning and permissions, recovery objective, data export, support hours, availability and responsibilities. For backup, a tick marked “included” is insufficient: specify which data returns to an independent environment within what time and who actually performs the exercise. A subscription shifts operating responsibility rather than eliminating it.
For a real decision, DAXS can establish the required functions, put both quotes on the same basis and replace assumptions with measurements and contracts. Contact DAXS.
Sources: NIST SP 800-145: cloud and service model definitions · AWS Well-Architected: include operations and administration in total cost · Nextcloud: components of a complete backup · Nextcloud: document service configuration.
