Cloud vs on-premise ERP: how the total cost differs

What changes between cloud and on-premise

With a cloud subscription the vendor runs the servers, backups and upgrades, and you pay a recurring fee. On-premise you usually buy a perpetual licence, pay yearly maintenance, and run infrastructure yourself. For example, Odoo's subscription includes hosting on Odoo Online, while self-hosting is available on its Custom plan.

What secondary sources report

ERP Research puts annual maintenance at 18–22% of the perpetual licence price, initial on-premise hardware at $20,000–$200,000 and yearly infrastructure upkeep at $5,000–$50,000. For a 100-user mid-market deployment it estimates a 5-year TCO of $600K–$2M in the cloud and $600K–$2.5M on-premise — broadly overlapping. For SAP Business One it reports perpetual licences of $3,500–$5,500 per user plus 18–20% maintenance.

Which of the ten systems can run on-premise

Generated from our data. Systems listed as cloud-only are only modelled as subscriptions; this reflects the pricing pages we verified, not every licensing option a vendor may offer.

What our calculator models

Choosing 'self-host' adds a yearly hosting assumption for systems that can run on-premise. It does not switch to perpetual licensing: licence lines stay at subscription prices, and a warning says so. Initial hardware is not included. Use the result as a rough guide for the subscription-plus-self-hosting case only.

FAQ

Is on-premise ERP cheaper?

Not reliably. Secondary sources show overlapping 5-year ranges; it depends on scale, in-house IT and upgrade frequency.