Worked estimates and choosing a host
Monthly cloud server cost: a worked example for a small Australian business
A line-by-line illustrative build of a monthly cloud hosting bill for a website, staff app and database in a Sydney region, from compute to GST, with three cheaper variations.
A realistic monthly cloud estimate is built from your own inventory, one line at a time: compute for each server and its running hours, disks, backups, outbound data, network items, support, licences, then FX and GST. In the illustrative example below, a small business running a website, a staff portal and a database in a Sydney region arrives at about $709 a month ex GST on demand, or about $779 including GST. Two changes (switching the portal off after hours and right-sizing the database after measurement) bring the ex-GST figure to about $528, a quarter lower without changing provider; a one-year commitment on the always-on servers takes it to about $445.
This guide supports the selection method. For each line in more depth, see vCPU and RAM pricing, storage and backups and egress and network charges. For commitment arithmetic see the commitment payback example. Every unit price here is illustrative, not a provider's price.
The business and its inventory
A 15-person accounting practice (invented for this example) runs:
- a public website on a small web server, always on;
- a staff portal used 7 am to 7 pm on weekdays;
- a database server holding client records, always on;
- daily snapshots kept 30 days, and a weekly copy kept 12 weeks in object storage;
- about 250 GB a month of outbound data;
- one load balancer, two public IPv4 addresses, a basic paid support plan.
The practice is GST-registered and the provider bills in AUD through a local reseller. Running hours: always-on = 730 a month; portal = 12 hours × 22 weekdays = 264.
The line-by-line build (on demand)
| Line | Basis (illustrative) | Monthly ex GST |
|---|---|---|
| Web server, 2 vCPU / 4 GB | 730 h × $0.10 | $73.00 |
| Portal server, 2 vCPU / 8 GB, always on | 730 h × $0.20 | $146.00 |
| Database server, 4 vCPU / 16 GB | 730 h × $0.40 | $292.00 |
| Disks | 3 × 80 GB × $0.12 | $28.80 |
| Snapshots (30 days) | 360 GB × $0.06 | $21.60 |
| Weekly copies in object storage | 12 × 120 GB × $0.025 | $36.00 |
| Outbound data | (250 − 100 free) GB × $0.14 | $21.00 |
| Load balancer | 730 h × $0.03 + $8 usage | $29.90 |
| Two public IPv4 addresses | 2 × 730 h × $0.007 | $10.22 |
| Support plan | monthly minimum | $50.00 |
| Total ex GST | $708.52 | |
| GST 10% | $70.85 | |
| Total including GST | $779.37 |
The three servers account for $511 of $708.52, or 72%. The other 28% is what a "server price" quote leaves out.
Three changes that lower the bill
1. Switch the portal off out of hours. The portal only needs 264 hours. 264 × $0.20 = $52.80 instead of $146.00, saving $93.20 a month. A schedule in the console or a simple script does this; staff who work late need a way to start it.
2. Right-size the database after measuring. A month of monitoring shows memory peaking at 9 GB and CPU at 35%. A 2 vCPU / 16 GB memory-optimised size at an illustrative $0.28 an hour fits: 730 × $0.28 = $204.40, saving $87.60. Test performance at month-end before deciding.
3. Commit on the always-on servers. The web and database servers run all the time. A one-year no-upfront commitment at an illustrative 30% discount: ($73.00 + $204.40) × 30% = $83.22 saved a month. Do this last, after right-sizing.
| Version | Monthly ex GST | Change |
|---|---|---|
| Starting point | $708.52 | – |
| After portal schedule | $615.32 | −$93.20 |
| After database right-size | $527.72 | −$87.60 |
| After commitment | $444.50 | −$83.22 |
The first two changes cut the bill by 25.5% with no lock-in. The commitment takes the total reduction to 37.3%, but ties the practice to those two servers for a year, so it should come only after the right-sizing has been tested.
Using the estimator for a quick range
The monthly server cost estimator uses: servers × price band + fixed extras. For this practice, before changes: 3 servers at an illustrative $70–$300 each, plus fixed extras of $197.52 (disks, snapshots, object storage, egress, load balancer, IPs and support: $28.80 + $21.60 + $36.00 + $21.00 + $29.90 + $10.22 + $50.00). Range: 3 × $70 + $197.52 = $407.52 to 3 × $300 + $197.52 = $1,097.52. The detailed build ($708.52) sits inside it; the range is wide because the band is generic.
Where the estimate can go wrong
- USD billing. If the provider bills in US dollars, convert at today's rate and add a buffer (see USD pricing and FX).
- Licences. If any server runs Windows Server or a commercial database, the hourly price includes licence costs; see support plans and software licences.
- Admin time. Self-managed servers need patching and monitoring. At an illustrative 3 hours a month at $120 an hour, add $360. A managed option may then be cheaper; see managed cloud vs self-managed.
- Growth. Re-run the estimate at twice the traffic and data; egress and backups scale with it.
Frequently asked questions
Why does this example use a local reseller?
To keep GST and currency simple. With direct USD billing, add FX and card fees and check the GST treatment.
Is 30% a typical commitment discount?
It is an illustrative figure. Actual discounts vary by provider, region, term, payment option and instance type; check the provider's pricing page.
Should the database go on a managed database service instead?
Possibly. It can remove patching and backup work but is priced differently. Price both on the same inventory.
How often should I re-estimate?
At every renewal or major change, and after the first full month of real bills.
Sources
- Australian Taxation Office — GST on business purchases, input tax credits
- Australian Cyber Security Centre (ASD) — backup and patching guidance
- Office of the Australian Information Commissioner — securing client records under APP 11
- business.gov.au — budgeting and cash flow for small business
