Should You Self-Host? TCO Calculator Breakdown

"Self-hosting saves money" sounds obvious until you factor in DevOps labor at $85/hour, backup storage, SSL certificates, monitoring tools, and the 3 AM server outage.

SaaS vendors love pointing to these hidden costs. "Sure, our CRM costs $50/user/month, but what about YOUR time managing a server?"

This guide breaks down real total cost of ownership (TCO) for 5 common business tools, comparing SaaS subscription fees against self-hosted infrastructure over 5 years.

The answer depends on team size, technical capacity, and growth trajectory—not one-size-fits-all platitudes.

TCO Framework: What to Actually Count

SaaS Total Cost (5 Years)

Explicit costs:

• Monthly subscription × 60 months
• Per-user fees (often increasing annually)
• Add-on features (SSO, advanced analytics, API access)
• Overage fees (storage, bandwidth, API calls)

Hidden costs:

• Vendor price increases (15-25% annually for many SaaS)
• Migration lock-in (switching costs after 3 years)
• Data export fees
• Compliance add-ons (SOC2, HIPAA)

Self-Hosted Total Cost (5 Years)

Infrastructure:

• VPS hosting × 60 months
• Backup storage × 60 months
• CDN/bandwidth (if applicable)
• Domain + SSL certificates × 5 years

Labor:

• Initial setup (DevOps time)
• Monthly maintenance (updates, monitoring)
• Incident response (outages, security patches)
• Upgrades and migrations

Software:

• Paid licenses (if not using FOSS)
• Support contracts (optional)
• Monitoring tools

Risk mitigation:

• Downtime impact (calculate hourly business value)
• Security breach potential

Case Study 1: Project Management (20-Person Team)

SaaS Option: Asana Business

Subscription:

• $24.99/user/month × 20 users = $499.80/month
• Year 1: $5,998
• Year 2: $6,598 (10% price increase)
• Year 3: $7,258
• Year 4: $7,984
• Year 5: $8,782
• 5-year total: $36,620

Add-on costs:

• Advanced reporting: +$5/user/month ($6,000 over 5 years)
• Realistic 5-year total: $42,620

Self-Hosted Option: Taiga

Infrastructure:

• Hetzner CPX21 (3 vCPU, 4GB RAM): €9/month ($10/month)
• Backup storage (50GB): $2.50/month
• Domain + SSL: $15/year
• Total: $12.50/month × 60 = $750
• + Domain: $75
• Infrastructure total: $825

Labor:

• Initial setup: 4 hours × $85/hour = $340
• Monthly maintenance: 30 min/month × 60 months = 30 hours × $85 = $2,550
• Annual upgrades: 2 hours/year × 5 years = 10 hours × $85 = $850
• Incident response: 5 incidents over 5 years × 2 hours = 10 hours × $85 = $850
• Labor total: $4,590

Total 5-year TCO: $5,415

Savings: $37,205 (87% reduction)

Break-even analysis:

• Asana monthly: $500
• Self-hosted monthly equivalent: $90
• ROI positive after month 1

Case Study 2: CRM (10 Sales Reps)

SaaS Option: HubSpot Sales Hub Professional

Subscription:

• $100/user/month × 10 users = $1,000/month
• Year 1-5 (assuming 12% annual increase): $75,240
• Marketing Hub add-on (Year 2+): +$18,000
• 5-year total: $93,240

Self-Hosted Option: EspoCRM

Infrastructure:

• VPS (4GB RAM): $24/month × 60 = $1,440
• Backup: $5/month × 60 = $300
• Email sending service (SendGrid): $20/month × 60 = $1,200
• Infrastructure total: $2,940

Labor:

• Setup: 8 hours × $85 = $680
• Customization (fields, workflows): 12 hours × $85 = $1,020
• Monthly maintenance: 1 hour/month × 60 = $5,100
• Email deliverability tuning: 6 hours × $85 = $510
• Labor total: $7,310

Total 5-year TCO: $10,250

Savings: $82,990 (89% reduction)

Case Study 3: Analytics (500K Pageviews/Month)

SaaS Option: Mixpanel Growth Plan

Subscription:

• $25/month (up to 100K events)
• Overage: $0.0002/event
• 500K pageviews × 3 events avg = 1.5M events/month
• Cost: $280/month
• 5-year total: $16,800

Self-Hosted Option: Plausible Community Edition

Infrastructure:

• VPS (2GB RAM): $12/month × 60 = $720
• Database backup: $3/month × 60 = $180
• Infrastructure total: $900

Labor:

• Setup: 2 hours × $85 = $170
• Maintenance: 15 min/month × 60 = 15 hours × $85 = $1,275
• Labor total: $1,445

Total 5-year TCO: $2,345

Savings: $14,455 (86% reduction)

Case Study 4: Video Conferencing (50-Person Company)

SaaS Option: Zoom Pro

Subscription:

• $15.99/user/month × 50 users = $799.50/month
• 5-year total: $47,970

Self-Hosted Option: Jitsi Meet

Infrastructure:

• High-performance VPS (8 vCPU, 16GB RAM): $60/month × 60 = $3,600
• TURN server (for NAT traversal): $20/month × 60 = $1,200
• Bandwidth: $40/month × 60 = $2,400
• Infrastructure total: $7,200

Labor:

• Setup (including TURN configuration): 12 hours × $85 = $1,020
• Monthly monitoring: 45 min/month × 60 = 45 hours × $85 = $3,825
• Quality troubleshooting: 20 hours/year × 5 = 100 hours × $85 = $8,500
• Labor total: $13,345

Total 5-year TCO: $20,545

Savings: $27,425 (57% reduction)

Note: Jitsi requires more labor than typical self-hosted tools due to WebRTC complexity and user experience expectations.

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Configuring TURN servers, optimizing WebRTC bandwidth, and ensuring production-grade uptime for video conferencing requires specialized knowledge. If you want self-hosted collaboration tools deployed with professional monitoring and guaranteed uptime, managed infrastructure eliminates the DevOps burden.

When SaaS TCO Beats Self-Hosting

Scenario 1: Small Team (<5 People)

Example: Password manager

• 1Password: $7.99/user/month × 5 = $40/month ($2,400 over 5 years)
• Self-hosted Vaultwarden: $12/month VPS + 10 hours setup/maintenance ($1,570 total)

Savings: $830 over 5 years

Verdict: Self-hosting wins financially, but $830 over 5 years is minimal. If no one on the team has DevOps skills, SaaS makes sense.

Scenario 2: Rapid Scaling (2x growth annually)

Example: Customer support ticketing

• Year 1: 10 agents
• Year 5: 160 agents

SaaS (Zendesk):

• Scales automatically
• Per-user cost decreases with volume discounts

Self-hosted:

• Infrastructure costs scale linearly
• Labor increases for performance tuning
• Migration complexity mid-growth

Verdict: SaaS can be cheaper during hyper-growth due to economies of scale.

Scenario 3: Zero DevOps Capacity

If your team has no one capable of:

• SSH into a server
• Read Docker logs
• Configure NGINX
• Debug database connection errors

SaaS tax is cheaper than hiring a $120K DevOps engineer.

Hidden Self-Hosting Costs (Be Honest)

Opportunity Cost

Real scenario: Your CTO spends 8 hours/month maintaining self-hosted infrastructure. At $150/hour effective rate, that's $1,200/month ($72,000 over 5 years).

Question: Could that time generate more than $72,000 in product value?

If yes, buy SaaS. If no (infrastructure IS your product), self-host.

Downtime Impact

Calculate hourly business value:

• E-commerce site: $5,000/hour revenue
• SaaS app: $500/hour (signup rate × LTV)
• Internal tool: $150/hour (employee productivity × hourly rate)

Downtime estimate:

• SaaS (with 99.9% SLA): 8.76 hours/year
• Self-hosted (amateur setup): 20-40 hours/year
• Self-hosted (professional setup): 4-8 hours/year

Downtime cost difference: E-commerce with amateur setup: (35 hours - 8.76 hours) × $5,000 = $131,200 over 5 years.

This alone can eliminate self-hosting savings.

Security Breach Cost

Average data breach cost (2026): $4.88 million

SaaS advantage:

• Dedicated security team
• SOC2/ISO27001 compliance
• Cyber insurance
• Vendor liability

Self-hosted risk:

• You're responsible for security
• Requires security expertise
• Proper configuration crucial

Mitigation:

• Automated security updates
• Regular penetration testing
• Monitoring and alerting
• Incident response plan

If you can't do these, SaaS is safer.

TCO Decision Matrix

| Tool Type | Team Size | DevOps Skill | Verdict | | ------------------ | --------- | ------------ | ------------ | | Project management | <10 | Low | SaaS | | Project management | 10-50 | Medium | Self-host | | Project management | 50+ | High | Self-host | | CRM | <5 | Any | SaaS | | CRM | 5-20 | Medium+ | Self-host | | CRM | 20+ | High | Self-host | | Analytics | Any | Medium+ | Self-host | | Video conferencing | <20 | Low | SaaS | | Video conferencing | 20-100 | High | Self-host | | Video conferencing | 100+ | High | Hybrid | | Password manager | <20 | Low-Medium | SaaS | | Password manager | 20+ | Medium+ | Self-host | | Code repository | Any | Medium+ | Self-host | | Email | Any | Low-Medium | SaaS | | Email | Any | High | Still SaaS* |

*Email self-hosting adds minimal value and significant deliverability complexity.

The Real Formula

Self-hosting is cheaper when:
(SaaS monthly cost × 60) > (Infrastructure × 60) + (Labor hours × hourly rate) + (Downtime cost) + (Security risk cost)

Self-hosting makes sense when:
1. Financial ROI is positive AND
2. You have technical capacity AND
3. Data sovereignty matters (privacy, compliance, IP protection)

Real-World Hybrid Approach

Most companies end up here:

Self-host:

• Code repositories (GitLab)
• Project management (Taiga, Plane)
• Password manager (Vaultwarden)
• Analytics (Plausible)
• File storage (Nextcloud)

Stay SaaS:

• Email (Gmail, Fastmail, ProtonMail)
• Accounting (Xero, QuickBooks)
• Payroll (Gusto)
• Legal/compliance tools

Reasoning: Self-host tools where vendor lock-in is expensive and setup is straightforward. Stay SaaS for specialized domains requiring deep compliance expertise.

Use Our Calculator

Visit our TCO calculator to input your specific numbers:

• Team size
• Current SaaS costs
• Internal hourly rates
• Expected growth rate

Get personalized ROI analysis with 5-year projections.

The Exit-Saas Perspective

TCO calculations are useful, but they miss the fundamental question: Who controls your business-critical data?

Financial case: Save 60-90% over 5 years (for most tools)

Strategic case: Eliminate vendor dependencies that compound annually

Risk case: Remove single points of failure from your infrastructure

The best tool isn't always the cheapest. It's the one that aligns with your values, capacity, and trajectory.

Browse our tools directory for deployment guides and realistic TCO breakdowns for 800+ self-hosted alternatives.

Self-hosting isn't about saving money. It's about spending it on infrastructure you own instead of rent you'll pay forever.