SaaS vs Self-Host Cost Calculator
How this SaaS vs self‑host cost calculator works
This tool compares the total cost of using a subscription SaaS product with the total cost of running similar software on your own infrastructure over a period you choose. It focuses on direct, recurring expenses you can quantify: licenses or subscription fees, server and hosting spend, engineering labor, and energy use. The goal is to give you a clear, numbers‑based view rather than a generic pros and cons list.
To use the calculator, you provide the monthly subscription fee per user, how many users you expect, and how long you plan to use the software. For the self‑hosted side, you enter one‑time infrastructure and setup effort plus ongoing monthly time, labor rates, and energy costs. The calculator then estimates total SaaS cost and total self‑host cost for the same time window so you can see which option is cheaper and by how much.
Formulas used in the comparison
The SaaS side is modeled as a simple recurring subscription that scales with users and time. The self‑host side combines one‑time setup with operating expenses that repeat every month. Here is the core math, using the same symbols as the fields in this tool.
SaaS total cost
Let:
- f = SaaS monthly fee per user
- u = number of users
- m = number of months modeled
The total SaaS cost over m months is:
In plain language: monthly fee per user × number of users × number of months.
Self‑host total cost
For the self‑hosted option we track both one‑time and recurring items. Let:
- s = server & infrastructure cost (one‑time)
- r = hourly labor rate
- hs = initial setup hours (one‑time)
- hm = monthly maintenance hours
- e = monthly energy cost
- m = number of months modeled
The total self‑host cost over m months is:
This means: one‑time infrastructure + one‑time setup labor + (monthly maintenance labor + monthly energy) repeated every month.
Understanding the inputs
A reasonable estimate for each field makes the comparison much more reliable. Here is how to think about the key inputs:
- SaaS monthly fee per user: use the list price for the plan you are most likely to buy, including any mandatory add‑ons. If you expect discounts at higher seats, enter the effective average per‑user price.
- Number of users: count everyone who needs access over the period, not just power users. For shared accounts, estimate the equivalent user count based on real seat needs.
- Months of use: many teams model 12, 24, or 36 months. Shorter windows favor SaaS because the one‑time setup for self‑hosting is harder to amortize.
- Server & infrastructure cost: add up hardware, storage, backup, monitoring, and any hosting or cloud fees tied directly to this system. If you already own servers, estimate the incremental cost of capacity used.
- Initial setup hours: include installation, configuration, integration, security hardening, and documentation time. If multiple people are involved, convert to total hours across the team.
- Monthly maintenance hours: include patching, upgrades, incident response, uptime monitoring, and capacity planning linked to this software.
- Hourly labor rate: use fully loaded cost (salary + benefits + overhead), or an internal transfer rate if you have one. You can also use a higher figure to reflect opportunity cost of scarce engineering time.
- Monthly energy cost: include power, cooling, and any data‑center‑specific utility charges attributable to running this workload.
Interpreting your results
Once you enter your numbers, the calculator outputs total SaaS cost, total self‑host cost, and the difference between them. A positive difference means self‑hosting is more expensive than SaaS over the selected period. A negative difference means self‑hosting appears cheaper for that time horizon.
You can explore scenarios by adjusting user counts, months, or labor rates. For example, increasing the number of users usually raises SaaS cost linearly, while self‑host costs may grow more slowly until you hit the next capacity or staffing step change. Extending the number of months spreads the one‑time setup cost over a longer period, which often makes self‑hosting look more attractive if your monthly operating costs are low.
When SaaS vs self‑host tends to be cheaper
| Scenario | SaaS subscription | Self‑hosting |
|---|---|---|
| Small team, short project (e.g., < 12 months) | Often cheaper and faster to launch, minimal setup effort. | Setup time is hard to justify for a limited‑duration use case. |
| Rapidly growing user base | Costs scale linearly with seats; predictable budgeting. | May require step‑wise hardware or staffing upgrades at scale. |
| Long‑term, stable usage (3+ years) | Ongoing subscription may exceed ownership economics over time. | One‑time setup can be amortized, and recurring costs may stay flat. |
| Strong internal ops & platform team | Still attractive if that team is fully allocated elsewhere. | More likely to be cost‑effective when you already have the skills. |
| Strict data residency or compliance needs | Some vendors meet requirements but may add premium fees. | Can reduce vendor fees but shifts compliance burden onto your team. |
Worked example
Suppose you are evaluating a tool for 25 users over 24 months.
- SaaS monthly fee per user: $20
- Number of users: 25
- Months of use: 24
- Server & infrastructure cost: $1,200 one‑time
- Initial setup hours: 30
- Monthly maintenance hours: 6
- Hourly labor rate: $60
- Monthly energy cost: $40
SaaS total:
Csaas = 20 × 25 × 24 = $12,000
Self‑host total:
One‑time setup = $1,200 + (30 × $60) = $1,200 + $1,800 = $3,000
Monthly run rate = (6 × $60) + $40 = $360 + $40 = $400
Recurring over 24 months = 24 × $400 = $9,600
Cself = $3,000 + $9,600 = $12,600
In this scenario, self‑hosting is about $600 more expensive over two years. If you extended the model to 36 or 48 months without increasing maintenance effort, the one‑time setup cost would be spread over more time and the self‑host option might become competitive.
Assumptions and limitations
This calculator is intentionally simplified so it stays quick to use and easy to understand. Keep these assumptions and gaps in mind when interpreting results:
- It ignores taxes, financing costs, and accounting treatment such as depreciation or capitalization of software development.
- It treats most costs as linear with time and users, while real‑world infrastructure and staffing often change in steps (for example, adding a second on‑call engineer or another cluster).
- It does not include compliance, certification, security audits, incident penalties, or insurance, even though these can be significant for regulated industries.
- It assumes stable pricing over the modeled period and does not forecast vendor price increases, currency changes, or hardware refresh cycles.
- It focuses on direct financial costs and does not try to quantify qualitative factors like time‑to‑market, vendor lock‑in, feature velocity, or support quality.
Use the outputs as a structured starting point rather than a final verdict. If you are close to break‑even, small changes in labor rates, discount levels, or uptime requirements can easily flip the result.
Next steps and related tools
After you have a baseline comparison, you can refine the model by running multiple scenarios: optimistic vs conservative user growth, different contract lengths, or alternative hosting setups. It is also helpful to pair these cost calculations with other decision inputs such as risk, compliance, and product strategy.
For a broader view, consider evaluating data residency obligations, pricing tiers, and infrastructure choices alongside this tool so your business case covers more than just license costs.
| Option | Total Cost |
|---|---|
| SaaS subscription | |
| Self-hosted | |
| Difference |
| Team type | Users | SaaS cost ($) | Self-host cost ($) | Cheaper option |
|---|---|---|---|---|
| Startup design crew | 8 | 1,440 | 3,620 | SaaS |
| IT department with spare hardware | 25 | 4,500 | 3,150 | Self-host |
| Global customer support | 60 | 10,800 | 9,780 | Self-host (by $1,020) |