Business Central SaaS vs On-Premises TCO Calculator
This calculator compares the recurring cost of running Dynamics 365 Business Central as a Microsoft-hosted subscription against running it on your own servers. It adds the line items most quotes leave out: admin hours, infrastructure and upgrade effort.
Your numbers
Full users on Essentials or Premium. Team Members are cheap, model them in the license calculator.
Use your partner quote. Blended across Essentials and Premium if you use both.
Annualised licence or subscription plus enhancement plan or equivalent, from your quote.
Windows Server and SQL Server licences, hardware or VM hosting, backup, DR, monitoring.
Patching, backups, service tier tuning, certificates, user sync.
Environment admin, extension and update window management.
Averaged cost of cumulative updates and major version upgrades, including testing.
Your results
Planning estimate only. Prices, licensing rules and available deployment options change; confirm with your Microsoft partner. Excludes one-time implementation, customisation and data migration, which are similar in both models.
Cumulative cost by year
Sweeps Horizon from 1 to 10, holding your other inputs fixed.
Get a second opinion on your BC cost model
Send us your assumptions and we will sanity check the inputs against typical BC deployments.
Optional. The tool and every export work without this. No spam.
How to use it
Enter the number of full users, the per-user monthly price from your partner quote, and your on-premises annualised licence cost. Then fill in the infrastructure bill and the hours your team really spends keeping the servers healthy. Move the horizon slider to see the break-even point on the chart. If the lines never cross, the model says one option is cheaper at every horizon with your inputs.
The formula
Online annual cost is users times price times 12, plus admin hours times rate. On-premises annual cost is users times annual licence, plus infrastructure, admin labour and averaged upgrade effort. Totals multiply by the horizon. The tool deliberately ignores one-time implementation cost because it is broadly the same for both deployments, and it ignores discount ramps and price changes, so treat output as a ranking aid.
- Online: subscription plus a small admin allowance
- On-premises: licences, SQL and Windows, hardware or VM, backup, DR
- Upgrades: on-premises owners schedule and test them; online updates arrive on Microsoft's cadence
- Hidden cost: extension compatibility testing exists in both models
Reading the result
A small gap should not drive the decision. Look at non-financial factors too: data residency, integrations that need direct SQL access, air-gapped sites, and how fast you want to adopt new BC features. A gap of more than a few thousand dollars per year usually comes from infrastructure and admin time, so challenge those two inputs first and rerun with pessimistic and optimistic values.
Common mistakes
Teams often compare list subscription price against a perpetual licence they already own, which ignores that the owned licence still needs servers and upgrades. Others forget disaster recovery or count zero admin hours for on-premises because the work is absorbed by an existing team. Time is a real cost even when no invoice arrives.
Frequently Asked Questions
Does this include implementation cost?
No. Implementation, customisation and data migration are similar whichever deployment you choose, so they are left out to isolate the recurring difference. Add them separately if you need a full project budget.
Where do I get the per-user price?
From your Microsoft partner's quote or the current Microsoft price list for your region and currency. Essentials, Premium and Team Members differ, so use a blended figure or run the license cost calculator first.
Why does the chart start at one year?
Year one shows the early cost gap, which is often driven by hardware and setup. The slope after that shows the steady state and where, if ever, the two lines cross.
Is on-premises still an option for new customers?
Availability and licensing terms for on-premises Business Central change over time. Confirm the current options and end-of-support dates with your partner before basing a decision on this model.
If you are weighing a NAV or BC move and want the numbers checked against your actual usage data, we can review your assumptions and pull user and transaction volumes from your system.
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