--- title: "Cloud vs. On-Premises Backup: 5-Year Cost Comparison" date: 2026-01-13T10:05:00+01:00 author: FAST LTA canonical_url: "https://www.fast-lta.de//en/blog/cloud-vs-on-premises-kostenvergleich" section: "Entries: Articles" --- ### The Basis for Comparison [\#](#the-basis-for-comparison "The Basis for Comparison") All calculations are illustrative model estimates and assume: - **Annual data growth:** 20% (a conservative enterprise average) - **Retention:** 7 years total backup retention, active management over the 5‑year horizon - **Recovery scenario:** One full restore per year (DR test), one partial restore per quarter - **Support:** Business-class SLA (4‑hour response or equivalent) - **Region:** EU-based storage (EU cloud regions; on-premises in an EU data centre) Cloud figures are based on typical 2024/2025 public list rates for archive-class object storage and serve as order-of-magnitude benchmarks. Negotiated enterprise pricing varies. --- ### Scenario A: 50 TB Initial Backup Dataset [\#](#scenario-a-50-tb-initial-backup-dataset "Scenario A: 50 TB Initial Backup Dataset") #### Cloud Costs (5‑Year Estimate) [\#](#cloud-costs-5-year-estimate "Cloud Costs (5-Year Estimate)") - Storage (archive tier): roughly EUR 1,800 in year 1, rising to roughly EUR 3,700 in year 5; about EUR 14,500 over 5 years - Egress for annual full recovery tests: roughly EUR 1,000 to 2,500 per year; about EUR 7,400 total - Egress for quarterly partial restores: about EUR 3,000 total - API requests (PUT/GET/LIST): about EUR 1,500 total - Monitoring and management tools: about EUR 3,000 total - Business support tier: about EUR 2,500 total **5‑year cloud total: roughly EUR 32,500**, with annual costs growing from about EUR 4,500 (year 1) to about EUR 8,000 (year 5). Note: egress pricing dominates the variance. EU-region internet egress at hyperscalers runs roughly EUR 0.08 to 0.09 per GB at list price; a single full 50 TB restore costs roughly EUR 4,000 on its own. The totals above assume optimised retrieval tiers at the lower bound. #### On-Premises Costs (5‑Year Estimate) [\#](#on-premises-costs-5-year-estimate "On-Premises Costs (5-Year Estimate)") - Hardware acquisition (system with 75 TB usable): roughly EUR 18,000 in year 1 - Capacity expansion (+30 TB in year 3): roughly EUR 4,500 - Maintenance contract (around 15% of hardware per year): about EUR 13,500 total - Power and cooling (estimated 200 W at EU average electricity prices): about EUR 2,200 total - Personnel (0.1 FTE at EUR 60,000 fully loaded): about EUR 30,000 total - Backup software licensing: about EUR 6,000 total **5‑year on-premises total: roughly EUR 74,000**, front-loaded in year 1, flat thereafter. **Break-even (50 TB scenario):** In this model, cloud remains cheaper through roughly year 4 to 5. Beyond the 5‑year horizon, on-premises stabilises while cloud costs keep scaling with data volume. Note that the personnel line is the largest on-premises item; organisations that fold backup administration into existing staff capacity reach break-even considerably earlier. --- ### Scenario B: 200 TB Initial Backup Dataset [\#](#scenario-b-200-tb-initial-backup-dataset "Scenario B: 200 TB Initial Backup Dataset") #### Cloud Costs (5‑Year Estimate) [\#](#cloud-costs-5-year-estimate "Cloud Costs (5-Year Estimate)") - Storage: roughly EUR 7,200 (year 1) to EUR 14,800 (year 5); about EUR 57,800 total - Egress for annual full recovery tests: about EUR 29,700 total - Egress for quarterly partial restores: about EUR 11,900 total - API requests: about EUR 5,300 total - Monitoring and management: about EUR 4,500 total - Business support: about EUR 6,000 total **5‑year cloud total: roughly EUR 115,000**, with annual costs growing from about EUR 15,600 to about EUR 30,000. #### On-Premises Costs (5‑Year Estimate) [\#](#on-premises-costs-5-year-estimate "On-Premises Costs (5-Year Estimate)") - Hardware acquisition (280 TB usable): roughly EUR 45,000 in year 1 - Capacity expansion (+80 TB in year 3): roughly EUR 12,500 - Maintenance (around 15% per year): about EUR 33,750 total - Power and cooling (estimated 600 W): about EUR 6,550 total - Personnel (0.15 FTE): about EUR 45,000 total - Backup software licensing: about EUR 12,500 total **5‑year on-premises total: roughly EUR 154,000.** **Break-even (200 TB scenario):** Cloud and on-premises converge around year 3 to 4 in this model. Beyond that, cloud costs outpace on-premises, and the gap widens as data grows. A single unplanned full recovery (roughly EUR 16,000 to 18,000 in egress and retrieval at 200 TB) shifts break-even forward by months. --- ### The Hidden Cost Multipliers [\#](#the-hidden-cost-multipliers "The Hidden Cost Multipliers") #### Egress: The Largest Unplanned Expense [\#](#egress-the-largest-unplanned-expense "Egress: The Largest Unplanned Expense") Cloud providers charge for data leaving their infrastructure. For backup, this hits every recovery test and every real disaster recovery event. At 200 TB, a single full recovery at typical EU egress list rates (around EUR 0.08 per GB) costs roughly EUR 16,000, before retrieval fees or support costs. Many organisations skip routine restore testing because of egress costs. That creates a compliance problem: unverified backups do not satisfy audit expectations under ISO 27001, NIS2 risk-management measures, or national frameworks such as Germany’s BSI IT-Grundschutz. The EU Data Act bans charges for switching providers from January 2027, but operational restores and tests are not switching and remain billable. #### API Costs [\#](#api-costs "API Costs") Backup solutions generate large volumes of API calls for incremental backups, metadata checks, lifecycle enforcement and monitoring. A daily incremental job at 200 TB scale with deduplication and verification generates millions of requests per month. The per-request rates are tiny; the monthly totals are not. #### Support Tier Escalation [\#](#support-tier-escalation "Support Tier Escalation") Entry-level support plans do not deliver SLAs suitable for enterprise backup. Business-class support typically costs around 10% of monthly spend with a fixed minimum, a recurring overhead that grows with storage spend. #### Data Growth: The Calculation Breaker [\#](#data-growth-the-calculation-breaker "Data Growth: The Calculation Breaker") At 20% annual growth, a 50 TB dataset becomes roughly 125 TB after five years. Cloud costs scale continuously with volume, plus egress and API overhead. On-premises costs scale in discrete steps as capacity is added, then stay flat until the next expansion. --- ### EU-Specific Cost Factors [\#](#eu-specific-cost-factors "EU-Specific Cost Factors") #### GDPR Compliance Overhead [\#](#gdpr-compliance-overhead "GDPR Compliance Overhead") Organisations storing backup data with US-based providers must maintain a valid transfer mechanism (currently the Data Privacy Framework for certified providers, or SCCs plus assessments). Legal review, audits and documentation add real cost; for mid-sized organisations an estimated EUR 5,000 to 15,000 per year depending on internal legal capacity. On-premises backup removes the transfer question entirely. #### CLOUD Act Risk [\#](#cloud-act-risk "CLOUD Act Risk") The US CLOUD Act allows US authorities to compel US providers to disclose data they hold, including in EU data centres. Public sector bodies, healthcare providers and operators of critical infrastructure under NIS2 face regulatory exposure if backup data carries this disclosure risk. Discovering it late and migrating away adds unplanned egress, re-ingestion and project costs. On-premises systems under EU jurisdiction eliminate this exposure: the data stays where you put it. #### NIS2 Compliance [\#](#nis2-compliance "NIS2 Compliance") NIS2 (EU directive, transposed into national law since October 2024) requires essential and important entities to implement backup management and recovery as part of their risk-management measures. Cloud backup is not prohibited, but organisations must demonstrate control: access logging, integrity verification, recovery time evidence. On-premises systems make that audit trail straightforward; cloud architectures need additional tooling and configuration to match it. --- ### When Cloud Backup Makes Sense [\#](#when-cloud-backup-makes-sense "When Cloud Backup Makes Sense") Cloud backup is the right answer in specific circumstances: - **Small datasets (under roughly 10 TB)** with infrequent access and modest recovery requirements - **Remote site backup** where deploying hardware is cost-prohibitive - **An additional geo-redundant copy** on top of an on-premises primary backup - **Organisations without any IT infrastructure staff** For everything else, particularly growing datasets, regulatory obligations or recovery SLAs, on-premises backup delivers better TCO beyond the initial capital investment horizon, and it keeps the recovery path fast and under your control. --- ### Summary: 5‑Year TCO at a Glance (Model Values) [\#](#summary-5-year-tco-at-a-glance-model-values "Summary: 5-Year TCO at a Glance (Model Values)") - 50 TB initial: cloud roughly EUR 32,500, on-premises roughly EUR 74,000, break-even around year 4 to 5 (earlier if personnel costs are absorbed by existing staff) - 200 TB initial: cloud roughly EUR 115,000, on-premises roughly EUR 154,000, break-even around year 3 to 4 The larger the dataset, the sooner on-premises becomes the lower-cost option. Once break-even is reached, the on-premises cost curve flattens while cloud costs continue to rise, and every recovery event accelerates the divergence. --- ### Further Resources [\#](#further-resources "Further Resources") → The Cloud Backup TCO Trap: When Costs Spiral Out of Control (/en/blog/cloud-backup-tco-trap/) → Data Egress Fees: The Hidden Costs of Your Cloud Backup (/en/blog/egress-kosten-cloud/) → What Is Data Sovereignty? Definition and Three Dimensions (/en/blog/was-ist-datensouveraenitaet/) → Silent Brick System: On-Premises Backup and Secondary Storage (/en/produkte/silent-brick-system/) → Silent Cubes: Hardware WORM for Audit-Proof Archiving (/en/produkte/silent-cubes/) ### BSI IT-Grundschutz The BSI IT-Grundschutz is a framework developed by the German Federal Office for Information Security (BSI) with standardized security requirements for IT systems — for KRITIS operators, NIS2-affected organizations and public authorities, it is the central reference for demonstrable IT security measures. [Mehr erfahren →](https://www.fast-lta.de//en/glossary/bsi-it-grundschutz) ### Audit-Proof Archiving Audit-proof archiving describes the legally required property of an archiving system that preserves documents completely, immutably, traceably and accessibly at all times — and that this can be demonstrated without gaps to tax authorities, auditors and data protection supervisory bodies. [Mehr erfahren →](https://www.fast-lta.de//en/glossary/audit-proof-archiving) ### Data Sovereignty Data sovereignty describes an organization's complete control over its data: where it is stored, who can access it, which legal framework applies to it and whether it is available at any time without dependency on a single provider. [Mehr erfahren →](https://www.fast-lta.de//en/glossary/data-sovereignty) ### WORM WORM (Write Once, Read Many) refers to a storage principle in which data is written once and can technically no longer be altered or deleted — in hardware WORM, this immutability is a physical property of the storage controller, independent of software, operating system or user privileges. [Mehr erfahren →](https://www.fast-lta.de//en/glossary/worm) ### Disaster Recovery Disaster recovery refers to the structured processes and technical measures that ensure IT systems can be restored within defined timeframes (RTO) with maximum data loss (RPO) after a severe failure — ransomware attack, hardware failure or data center outage. [Mehr erfahren →](https://www.fast-lta.de//en/glossary/disaster-recovery)