ERPNext AWS Managed Services - 5-Year Total Cost of Ownership (TCO) Analysis
Executive Summary
Organization Size: 4,000 users
Environments: Development, SIT, UAT, Production + DR (Hot Standby)
Region: US-East-1 (Primary), US-West-2 (DR)
Exchange Rate: 1 USD = 56.50 PHP (as of January 2025)
Architecture Overview for 4,000 Users
Production Environment Sizing
- Compute: EKS with 12 nodes (m5.2xlarge) for high availability
- Database: RDS MySQL (db.r6i.4xlarge) Multi-AZ with read replicas
- Cache: Amazon MemoryDB (6 nodes, db.r6g.xlarge)
- Storage: Amazon EFS (10TB) + S3 (50TB)
- Network: Multi-AZ VPC with Site-to-Site VPN
Disaster Recovery (Hot Standby)
- RPO: < 5 minutes
- RTO: < 30 minutes
- **Cross-region replication for all data stores
- **Active-passive configuration with automated failover
1. Infrastructure Costs (Monthly)
Development Environment
| Component |
Specification |
Monthly Cost (USD) |
Monthly Cost (PHP) |
| EKS Control Plane |
1 cluster |
$73 |
₱4,125 |
| EC2 Instances |
2 × t3.large |
$122 |
₱6,893 |
| RDS MySQL |
db.t3.medium (Single-AZ) |
$67 |
₱3,786 |
| MemoryDB Redis |
1 × db.t4g.small |
$25 |
₱1,413 |
| ALB |
1 load balancer |
$22 |
₱1,243 |
| EFS |
100GB |
$30 |
₱1,695 |
| S3 |
500GB |
$12 |
₱678 |
| NAT Gateway |
1 gateway |
$45 |
₱2,543 |
| Data Transfer |
~500GB |
$45 |
₱2,543 |
| Subtotal |
|
$441 |
₱24,917 |
SIT Environment
| Component |
Specification |
Monthly Cost (USD) |
Monthly Cost (PHP) |
| EKS Control Plane |
1 cluster |
$73 |
₱4,125 |
| EC2 Instances |
3 × t3.xlarge |
$375 |
₱21,188 |
| RDS MySQL |
db.t3.large (Single-AZ) |
$134 |
₱7,571 |
| MemoryDB Redis |
2 × db.t4g.medium |
$90 |
₱5,085 |
| ALB |
1 load balancer |
$22 |
₱1,243 |
| EFS |
500GB |
$150 |
₱8,475 |
| S3 |
2TB |
$46 |
₱2,599 |
| NAT Gateway |
2 gateways |
$90 |
₱5,085 |
| Data Transfer |
~2TB |
$180 |
₱10,170 |
| Subtotal |
|
$1,160 |
₱65,540 |
UAT Environment
| Component |
Specification |
Monthly Cost (USD) |
Monthly Cost (PHP) |
| EKS Control Plane |
1 cluster |
$73 |
₱4,125 |
| EC2 Instances |
4 × m5.xlarge |
$614 |
₱34,691 |
| RDS MySQL |
db.r5.xlarge (Multi-AZ) |
$600 |
₱33,900 |
| MemoryDB Redis |
3 × db.r6g.large |
$405 |
₱22,883 |
| ALB |
2 load balancers |
$44 |
₱2,486 |
| EFS |
2TB |
$600 |
₱33,900 |
| S3 |
5TB |
$115 |
₱6,498 |
| NAT Gateway |
2 gateways |
$90 |
₱5,085 |
| Data Transfer |
~5TB |
$450 |
₱25,425 |
| CloudWatch |
Enhanced monitoring |
$100 |
₱5,650 |
| Subtotal |
|
$3,091 |
₱174,642 |
Production Environment
| Component |
Specification |
Monthly Cost (USD) |
Monthly Cost (PHP) |
| EKS Control Plane |
1 cluster |
$73 |
₱4,125 |
| EC2 Instances |
12 × m5.2xlarge |
$5,529 |
₱312,389 |
| RDS MySQL |
db.r6i.4xlarge (Multi-AZ) |
$3,744 |
₱211,536 |
| RDS Read Replicas |
2 × db.r6i.2xlarge |
$3,744 |
₱211,536 |
| MemoryDB Redis |
6 × db.r6g.xlarge |
$1,620 |
₱91,530 |
| ALB |
3 load balancers |
$66 |
₱3,729 |
| EFS |
10TB |
$3,000 |
₱169,500 |
| S3 |
50TB |
$1,150 |
₱64,975 |
| NAT Gateway |
3 gateways (Multi-AZ) |
$135 |
₱7,628 |
| Data Transfer |
~20TB |
$1,800 |
₱101,700 |
| CloudWatch |
Enhanced monitoring |
$500 |
₱28,250 |
| AWS WAF |
Web application firewall |
$200 |
₱11,300 |
| AWS Shield Standard |
DDoS protection |
$0 |
₱0 |
| VPN Connection |
Site-to-Site VPN |
$72 |
₱4,068 |
| Subtotal |
|
$21,633 |
₱1,222,264 |
Disaster Recovery Site (Hot Standby)
| Component |
Specification |
Monthly Cost (USD) |
Monthly Cost (PHP) |
| EKS Control Plane |
1 cluster (us-west-2) |
$73 |
₱4,125 |
| EC2 Instances |
8 × m5.2xlarge |
$3,686 |
₱208,259 |
| RDS MySQL |
db.r6i.4xlarge (Multi-AZ) |
$3,744 |
₱211,536 |
| MemoryDB Redis |
4 × db.r6g.xlarge |
$1,080 |
₱61,020 |
| ALB |
2 load balancers |
$44 |
₱2,486 |
| EFS |
10TB (replicated) |
$3,000 |
₱169,500 |
| S3 |
50TB (replicated) |
$1,150 |
₱64,975 |
| NAT Gateway |
2 gateways |
$90 |
₱5,085 |
| Cross-Region Replication |
Database + Storage |
$2,500 |
₱141,250 |
| Data Transfer |
Cross-region |
$1,000 |
₱56,500 |
| Route 53 Health Checks |
Failover monitoring |
$150 |
₱8,475 |
| Subtotal |
|
$16,517 |
₱933,211 |
Total Monthly Infrastructure Costs
| Environment |
Monthly Cost (USD) |
Monthly Cost (PHP) |
| Development |
$441 |
₱24,917 |
| SIT |
$1,160 |
₱65,540 |
| UAT |
$3,091 |
₱174,642 |
| Production |
$21,633 |
₱1,222,264 |
| DR (Hot) |
$16,517 |
₱933,211 |
| TOTAL |
$42,842 |
₱2,420,574 |
2. Operational Costs (Annual)
Personnel Costs
| Role |
FTE |
Annual Cost (USD) |
Annual Cost (PHP) |
| Cloud Architect (Senior) |
1 |
$150,000 |
₱8,475,000 |
| DevOps Engineers |
3 |
$360,000 |
₱20,340,000 |
| Database Administrator |
1 |
$110,000 |
₱6,215,000 |
| Security Engineer |
1 |
$130,000 |
₱7,345,000 |
| System Administrators |
2 |
$160,000 |
₱9,040,000 |
| 24/7 Support Team |
4 |
$240,000 |
₱13,560,000 |
| Subtotal |
12 |
$1,150,000 |
₱64,975,000 |
AWS Support & Services
| Service |
Annual Cost (USD) |
Annual Cost (PHP) |
| AWS Business Support (10% of spend) |
$51,410 |
₱2,904,665 |
| AWS Professional Services |
$50,000 |
₱2,825,000 |
| Third-party Monitoring Tools |
$24,000 |
₱1,356,000 |
| Security Audit & Compliance |
$30,000 |
₱1,695,000 |
| Subtotal |
$155,410 |
₱8,780,665 |
Training & Certification
| Item |
Annual Cost (USD) |
Annual Cost (PHP) |
| AWS Training Programs |
$20,000 |
₱1,130,000 |
| Certification Exams |
$5,000 |
₱282,500 |
| Conferences & Workshops |
$15,000 |
₱847,500 |
| Subtotal |
$40,000 |
₱2,260,000 |
3. Software Licensing Costs (Annual)
| Software |
Annual Cost (USD) |
Annual Cost (PHP) |
| ERPNext Enterprise Support |
$50,000 |
₱2,825,000 |
| Backup & Recovery Software |
$15,000 |
₱847,500 |
| Monitoring & APM Tools |
$20,000 |
₱1,130,000 |
| Security & Compliance Tools |
$25,000 |
₱1,412,500 |
| CI/CD Pipeline Tools |
$10,000 |
₱565,000 |
| Subtotal |
$120,000 |
₱6,780,000 |
4. Migration & Implementation Costs (One-time, Year 1)
| Activity |
Cost (USD) |
Cost (PHP) |
| Initial Assessment & Planning |
$30,000 |
₱1,695,000 |
| Architecture Design |
$50,000 |
₱2,825,000 |
| Data Migration Services |
$75,000 |
₱4,237,500 |
| Application Migration |
$100,000 |
₱5,650,000 |
| Testing & Validation |
$40,000 |
₱2,260,000 |
| Training & Knowledge Transfer |
$25,000 |
₱1,412,500 |
| Go-Live Support (3 months) |
$50,000 |
₱2,825,000 |
| Total |
$370,000 |
₱20,905,000 |
5. Cost Optimization with Reserved Instances (3-Year Term)
Reserved Instance Savings
| Environment |
Standard Cost/Year |
RI Cost/Year |
Savings/Year |
Savings (PHP) |
| Production |
$259,596 |
$155,758 |
$103,838 |
₱5,866,847 |
| DR |
$198,204 |
$118,922 |
$79,282 |
₱4,479,433 |
| UAT |
$37,092 |
$25,964 |
$11,128 |
₱628,732 |
| Total Annual Savings |
|
|
$194,248 |
₱10,975,012 |
6. Five-Year Total Cost of Ownership Summary
Year 1 (with Migration)
| Category |
Cost (USD) |
Cost (PHP) |
| Infrastructure (12 months) |
$514,104 |
₱29,046,876 |
| Reserved Instances (prepaid) |
$300,644 |
₱16,986,386 |
| Operations |
$1,345,410 |
₱76,015,665 |
| Software Licensing |
$120,000 |
₱6,780,000 |
| Migration (one-time) |
$370,000 |
₱20,905,000 |
| Year 1 Total |
$2,650,158 |
₱149,733,927 |
Years 2-5 (Annual)
| Category |
Cost (USD) |
Cost (PHP) |
| Infrastructure (with RI savings) |
$319,856 |
₱18,071,864 |
| Operations |
$1,345,410 |
₱76,015,665 |
| Software Licensing |
$120,000 |
₱6,780,000 |
| Annual Total (Years 2-5) |
$1,785,266 |
₱100,867,529 |
7. Five-Year TCO Grand Total
| Period |
Cost (USD) |
Cost (PHP) |
| Year 1 |
$2,650,158 |
₱149,733,927 |
| Year 2 |
$1,785,266 |
₱100,867,529 |
| Year 3 |
$1,785,266 |
₱100,867,529 |
| Year 4 (RI renewal) |
$2,085,910 |
₱117,853,915 |
| Year 5 |
$1,785,266 |
₱100,867,529 |
| 5-Year Total |
$10,091,866 |
₱570,190,429 |
| Average Annual Cost |
$2,018,373 |
₱114,038,086 |
| Cost Per User Per Month |
$42.05 |
₱2,376 |
8. Cost Breakdown by Category (5-Year)
| Category |
5-Year Total (USD) |
5-Year Total (PHP) |
Percentage |
| Infrastructure |
$2,893,424 |
₱163,478,456 |
28.7% |
| Personnel |
$5,750,000 |
₱324,875,000 |
57.0% |
| AWS Support |
$777,050 |
₱43,903,325 |
7.7% |
| Software Licensing |
$600,000 |
₱33,900,000 |
5.9% |
| Migration |
$370,000 |
₱20,905,000 |
3.7% |
| Training |
$200,000 |
₱11,300,000 |
2.0% |
| Total |
$10,091,866 |
₱570,190,429 |
100% |
9. ROI Considerations
Cost Savings vs On-Premise
| Factor |
Annual Savings |
5-Year Savings |
| Hardware refresh avoided |
$200,000 |
$1,000,000 |
| Data center costs |
$150,000 |
$750,000 |
| Power & cooling |
$60,000 |
$300,000 |
| Reduced downtime (99.95% SLA) |
$100,000 |
$500,000 |
| Total Savings |
$510,000 |
$2,550,000 |
Business Benefits
- Scalability: Handle peak loads without infrastructure investment
- Agility: Deploy new features 75% faster
- Reliability: 99.95% uptime SLA with automatic failover
- Security: Enterprise-grade security with compliance certifications
- Global Reach: Easy expansion to new regions
10. Recommendations
Cost Optimization Strategies
- Reserved Instances: Commit to 3-year terms for 40% savings
- Spot Instances: Use for development/testing (70% savings)
- Auto-scaling: Right-size resources based on actual usage
- S3 Intelligent Tiering: Automatic cost optimization for storage
- Scheduled Scaling: Reduce non-production resources after hours
Phased Implementation Approach
- Phase 1 (Months 1-3): Migrate Dev/SIT environments
- Phase 2 (Months 4-6): Migrate UAT, establish DR
- Phase 3 (Months 7-9): Production migration
- Phase 4 (Months 10-12): Optimization and automation
Risk Mitigation
- Maintain on-premise backup for first 6 months
- Implement comprehensive monitoring and alerting
- Regular disaster recovery drills (quarterly)
- Multi-region backup strategy
- 24/7 support coverage with defined SLAs
Appendix: Detailed Assumptions
Technical Assumptions
- 4,000 concurrent users with 80% daily active
- Average 50 transactions per user per day
- 10TB initial data with 20% annual growth
- 99.95% uptime requirement
- Peak usage 3x average during month-end
Financial Assumptions
- USD to PHP exchange rate: 56.50
- Annual inflation: 3% (not included in calculations)
- AWS price reductions: 5% annually (conservative)
- Personnel cost increases: 5% annually
- No major architectural changes over 5 years
Compliance Requirements
- GDPR compliance for data protection
- SOC 2 Type II certification
- ISO 27001 compliance
- Regular security audits (quarterly)
- Data residency in specific regions
Note: Prices are estimates based on current AWS pricing (January 2025) and may vary based on actual usage, negotiated discounts, and AWS price changes. Consider engaging AWS sales for Enterprise Agreement (EA) discounts for spending over $500K annually.
