It is crucial to understand that time and number of users affect TCO in different ways. While the impact of number of users on TCO is very predictable, the impact of time is not. This is because over time, unexpected events such as expensive hardware or software upgrades could suddenly increase the TCO of the on-premises module. This risk is largely mitigated under the software model.
Use this calculator to determine TCO before approaching a vendor for a solution. Depending on the solution you are sourcing, this is an important part of your negotiation leverage.