Cost estimates and choosing a host
Cloud hosting cost estimates for Canadian small businesses: three worked examples in CAD
Step-by-step illustrative monthly and three-year cost estimates for a website, an online store and a business application, with tax, FX and commitment options.
A reliable hosting estimate is built in five steps: size the workload, list every bill line, price each line from the provider's own calculator for a Canadian region, add currency and tax, then project three years including growth, renewals and commitment discounts. The three examples below take a brochure website, an online store and a line-of-business application through those steps. Every price in them is illustrative: they show the method and the arithmetic, not what any provider charges.
This is the overview for the estimates and choosing section. Use it with the monthly cost estimator, the tax, FX and renewal calculator and the migration and commitment payback calculator.
Step 1: size the workload
Before any price, write down:
- what runs (website, store, database, file shares, internal tools);
- how many users and when they use it (business hours or around the clock);
- current CPU and memory use, if you already host it (right-sizing guide);
- storage now and in three years;
- monthly outbound traffic;
- how much downtime you can tolerate, and how much data you can afford to lose.
The last point decides whether you need one server or two, and whether backups must be off-site.
Example 1: brochure website (illustrative)
A professional practice has a 15-page website with a contact form, about 5,000 visits a month.
| Option | Line | Illustrative monthly CAD |
|---|---|---|
| Shared hosting | Plan at renewal price | $25 |
| Backup add-on | $4 | |
| Total | $29 | |
| Managed website hosting | Plan including backups and updates | $45 |
| Total | $45 |
Three-year view: shared $29 × 36 = $1,044; managed $45 × 36 = $1,620. The managed plan costs $576 more over three years and removes update and backup chores. Which is the better fit depends on who would otherwise do those chores. More detail in small business website hosting cost.
Example 2: online store on a VPS or cloud VM (illustrative)
A retailer runs its own store software with about 40,000 page views a month.
| Line | VPS option | Cloud VM option |
|---|---|---|
| Server (4 vCPU / 8 GB) | $70 | $120 |
| Disk (160 GB SSD) | Included | $22 |
| Backups / snapshots | $14 | $18 |
| Egress (350 GB) | Included in allowance | $30 |
| Public IP | Included | $5 |
| Monthly total | $84 | $195 |
The VPS is cheaper here because the plan includes disk and transfer. The cloud option buys faster scaling for holiday peaks and managed services if the store grows. If the business also needs a second server for failover, add one more server line to either option.
Example 3: business application with a database (illustrative)
A 30-person firm runs an internal Windows application and a SQL database.
| Line | Illustrative monthly CAD |
|---|---|
| Two application VMs, Windows licence included, $150 each | $300 |
| Managed database, small production tier | $260 |
| Block storage, 400 GB | $56 |
| Backups, about 1 TB stored | $50 |
| VPN connection to the office | $40 |
| Egress, 200 GB | $24 |
| Support plan | $50 |
| Subtotal | $780 |
Licences are a large share here. See software licences in the cloud for licence-included versus bring-your-own.
Step 4: add currency and tax
If Example 3 is billed in US dollars and converts to $780, add an FX buffer and card fee, then tax:
- Buffer 5% + card fee 2.5% = 7.5%: $780 × 7.5% = $58.50, giving $838.50
- HST 13% (Ontario): $838.50 × 13% = $109.01, giving $947.51 cash per month
- If the provider is a regular GST/HST registrant, the $109.01 is normally recoverable as an ITC. See GST/HST, QST and PST on cloud hosting and USD pricing and FX.
Step 5: three-year projection
For Example 3, before tax, with $838.50 a month as the starting point:
| Scenario | Year 1 | Year 2 | Year 3 | Three-year total |
|---|---|---|---|---|
| On demand, 5% yearly growth in usage | $10,062 | $10,565 | $11,093 | $31,720 |
| Commit the two VMs for three years at an illustrative 30% off their $300 line, other lines on demand with growth | $8,982 | $9,431 | $9,903 | $28,316 |
How the second row is built: the VM line falls from $300 to $210, saving $90 a month or $1,080 a year, so year 1 is $10,062 − $1,080 = $8,982. For simplicity the same 5% growth is applied to the whole bill (the committed line would not actually grow), and FX on the committed portion is ignored. The commitment saves about $3,400 over three years in this example, but only if the two VMs run for all three years. See on-demand vs reserved, savings plans and spot.
Other choices that change the estimate
- Managed vs self-managed: a management fee replaces your own admin time; see managed cloud vs self-managed.
- Cloud vs a server in your office: see on-premise server vs cloud cost.
- Cost controls after go-live: see budgets, alerts and tagging.
- Choosing the provider: see the hosting selection checklist.
FAQ
How accurate is a first estimate likely to be?
Rough, until you have measured real usage. Treat the first estimate as a range, use the low and high fields of the estimator, and revisit it after two or three months of bills.
Should I include my own time?
Yes, if you or an employee will administer the servers. An hour a month of patching and checking backups has a cost, and it is often the deciding factor between self-managed and managed options.
Where do I get real prices?
From each provider's public price pages and calculators, for the Canadian region you will use, on the date you compare. Save a copy or screenshot of the page with the date, because prices change.
Sources
- Canada Revenue Agency — GST/HST, input tax credits, deductibility of business expenses
- Bank of Canada — exchange rates for USD-priced services
- Canadian Centre for Cyber Security — backup and recovery practices for small organisations
