Home > Workload Solutions > Other Workload Solutions > Whitepapers > Choosing Between On-Premises vs the Public Cloud for Workload Deployment > The Public Cloud breakeven point
The two workload deployment options can be plotted on a graph that illustrates accumulating costs over time.
In the case of the (green) on-premises solution, there is an initial cost at the beginning associated with the capital expenditure of the solution, and costs accumulate to run the infrastructure over time.
In the Public Cloud scenario (red), there is no upfront cost at the beginning, but costs will accumulate over time as the service is consumed.
The diagram shows a breakeven point where the two lines cross–this represents the point in time when the accumulated costs of the two solutions are equal. In other words, when this crossover point in time is reached, the number of dollars spend on the two alternative solutions is the same. This breakeven point occurs when the aggregate money spent on the Public Cloud solution could have paid for the equivalent on-premises solution. After this point, the monthly Public Cloud cost will continue to accumulate at the same rate, but the on-premises solution will have been paid for and will continue to be useful for the balance of its life cycle.
It should be noted that the green line is not straight forever – at some point there are life-cycle investments into the hardware in the form of upgrades. In that case, there will be a step upwards in the plot, after which this trend will continue in a straight-line fashion.
Depending on the workload, this crossover point may not occur. In other words, if it is a relatively modest workload, it may always be cheaper to run the workload in the Public Cloud. This would represent an excellent choice for using the Public Cloud to run that workload. But for resource-intensive workloads, this crossover point happens quickly, highlights the tendency for such workloads to be poor candidates to run in the Public Cloud.
In conclusion, it makes sense to run some workloads in the Public Cloud, while other workloads make sense to run on-premises. Therefore, this reinforces the idea that the Hybrid Cloud delivers the best possible value for customers, where the location that makes most sense for a particular workload is selected.