Calculate steady-state cost for each scenario, allocate one-time migration and exit costs across the planning horizon, and vary the assumptions with the greatest uncertainty. A break-even point is useful only when both sides provide a comparable workload and service level.
Build the equation from auditable input rows
For the managed path, include subscription or usage charges, support, overages, storage, transfer, and buyer-owned operating duties. For the self-hosted path, include cloud or hardware resources, control-plane components, licenses, backups, monitoring, support tools, staff time, incident allowance, and capacity headroom. Add migration, dual running, training, and future exit work as one-time rows with stated allocation.
Choose the unit that drives the decision: concurrent environment, active tenant, job-hour, request, dataset, or monthly workload. Express fixed and variable costs separately. The point where scenario totals cross should be reproducible from the workbook, with no hidden multiplier or rounded chart value standing in for the underlying formula.
Use sensitivity ranges before naming a threshold
Vary utilization, demand growth, managed discounts, staff hours, loaded rates, incident work, and migration duration. Show which variables move the crossing point most. A single central estimate can make an uncertain labor assumption look exact, while a range reveals whether the apparent advantage survives reasonable changes in workload and operating effort.
Test non-cost constraints beside the calculation. If one path cannot meet isolation, region, recovery, support, or staffing requirements, its cheaper number may not be an eligible alternative. The final threshold should carry a date, source set, service-level boundary, and condition for recalculation when prices or workload change.
Where the service stops
Reality Contact, LLC prepares a technical cost and operating-burden model, but does not provide financial, tax, legal, procurement, security, or compliance advice, select a vendor, certify savings, or own the buyer's architecture decision. The buyer verifies internal rates and requirements, obtains current binding provider quotes, reviews security and compliance with qualified owners, and decides whether to renew, negotiate, pilot, migrate, or hold. This is technical cost modeling and document preparation; it does not replace financial, tax, legal, procurement, security, compliance, or professional advice. Public and supplied prices are dated inputs, not binding quotes, and the buyer must verify current terms and requirements before acting.
Sources: Google Cloud Pricing Calculator; Microsoft Azure cost optimization guidance.