Managed Services vs Self-Hosting: The Honest Cost Comparison

What the managed price actually includes

• Installation, configuration and version upgrades.
• Automated backups with point-in-time recovery.
• Patching, including security patches applied promptly.
• Monitoring and alerting, configured.
• High availability with automated failover, where enabled.
• Replication set up correctly rather than approximately.
• Someone else on call for the infrastructure layer.

Every one of these is work you would otherwise do. Most of them are work that is done badly when done under time pressure alongside other responsibilities.

The comparison, done properly

Put an hourly figure on engineering time and the calculation changes shape. Four hours a month of database operations at a realistic rate usually exceeds the managed premium for a small instance.

When self-hosting is clearly right

• You have genuine expertise on the team already, and the operational load is small.
• The workload is large enough that the managed premium is a substantial absolute number.
• You need configuration or extensions the managed service does not permit.
• It is development or staging, where an outage is an inconvenience.
• You are deliberately avoiding provider-specific dependency.
• Cost pressure is severe and time is the resource you have most of.

When managed is clearly right

• The team is small and its time is the scarcest resource.
• The data is important enough that backups must be reliable rather than intended.
• You need high availability and would otherwise build it yourself.
• Nobody on the team wants to be the person who owns database upgrades.
• Compliance requires evidence the provider already produces.
• The service is not your differentiator, which it usually is not.

The middle path

It is not all or nothing:

1. Managed for the database, where mistakes are expensive and irreversible.
2. Self-hosted for caches, where data loss is tolerable and the software is simple to run.
3. Managed object storage and CDN, which are cheap and nobody self-hosts well.
4. Self-hosted application servers, which are the easiest thing to operate.
5. Managed for production, self-hosted for non-production.

The principle: pay for management where failure is costly and expertise is scarce; self-host where failure is cheap and the software is simple.

Watch the premium scale

The managed premium is a multiple, so it grows with the instance. A small managed database costs a modest amount more than the equivalent server; a very large one costs a great deal more.

At a certain scale, hiring or assigning someone to run databases well becomes cheaper than the premium. That crossover is real, and it arrives later than enthusiasts claim and sooner than vendors suggest. Calculate it with your own numbers rather than accepting either position.

Common questions

Where to go next

See when a VPS is not enough and cutting a cloud bill.