The Edge-vs-Cloud TCO
The Edge-vs-Cloud TCO
Ada re-derives the 3-year edge-vs-cloud total cost of ownership, every line item
ADA · CALCULATION AUDIT
Foundations · optional mathematics
The Edge-vs-Cloud TCO
The chapter compares three-year total cost for 500 vibration sensors: cloud-only totals $11,858, while an edge-hybrid path with a 95% FFT-plus-anomaly cut totals $7,027 — a 41% saving. A 41% figure is just a subtraction of two totals, and bandwidth is 71% of the cloud bill. This audit lists every line item of the edge-vs-cloud TCO so the number survives a budget review.
Companion to the chapter Edge Cost and Trade-offs — every number here comes from that chapter.
Ada's Calculation Audit: the 3-year edge-vs-cloud TCO — 500 vibration sensors, every line item, ~5 minutes
A 41% saving is a subtraction of two totals. Here is each line item for both architectures, so the number survives a budget review rather than a slide.
See the relationship before changing it
Set the input, apply the rule, then read the result with its unit.
The retained audit below checks several chapter fixtures. This model keeps those stated values fixed and changes only three-year edge cost, so the numeric fixture does not switch without explanation.
Derive the baseline in four named moves
- 1
Name the input. The chapter baseline is 7027 USD.
- 2
Name the relationship. saving = (11,858 - edge cost) / 11,858 x 100
- 3
Substitute with units. (11,858 - 7,027) / 11,858 x 100 = 40.7%
- 4
Read the result. Keep the unit beside the value. Use it only inside the technical boundary on this page.
Predict, then change three-year edge cost
Try Predict the direction of saving = (11,858 - edge cost) / 11,858 x 100. Test another three-year edge cost, then compare saving against cloud-only.
Observe A higher edge total erodes the saving against the fixed cloud-only comparison. Reset three-year edge cost to 7027 and compare saving against cloud-only.
Explain The saving is the cloud-only bill left after paying the edge deployment, so each extra edge dollar removes the same share of the baseline saving.
Check yourself
What should you do before trusting a moved-control result?
What does this small model leave out?
The working
1. Size the raw pipe. Per sensor 1000 samples/s × 2 B = 2000 B/s = 16 kbps; fleet 500 × 16 = 8000 kbps = 8 Mbps (9.6 Mbps with 20% overhead).
2. Cloud-only over 36 months. Storage 2592 × $0.023 × 36 = $2,146; bandwidth 2592 × $0.09 × 36 = $8,398; compute $0.05 × 8760 × 3 = $1,314. Total = $11,858.
3. Edge-hybrid over 36 months. A 95% FFT-plus-anomaly cut leaves 129.6 GB/month cloud. Hardware $5,000; storage $107; bandwidth $420; periodic training $1,500. Total = $7,027.
| Line item | Cloud-only (3 y) | Edge-hybrid (3 y) |
|---|---|---|
| Edge hardware | — | $5,000 |
| Cloud storage | $2,146 | $107 |
| Bandwidth | $8,398 | $420 |
| Compute | $1,314 | $1,500 |
| Total | $11,858 | $7,027 |
| Saving | $11,858 − $7,027 = $4,831 = 40.7% ≈ 41% | |
What the audit buys you: bandwidth ($8,398) is 71% of the cloud-only bill, and the FFT step (a verifiable 60.9% cut before anomaly filtering, 95% after) is what collapses it — the gateway's $5,000 is repaid by bandwidth savings alone, which is why the 41% edge advantage holds even though the edge path buys hardware the cloud path never does.
The TCO comparison deliberately does not simulate demand growth, outages, inflation, tax, depreciation, failure risk, or migration cost; it totals the chapter's fixed edge and cloud line items over the stated horizon.
Work the audit first, then check the displayed derivation.
Every number above is taken from the chapter's own edge-vs-cloud TCO example and re-derived step by step.