"How much does cloud migration cost?" is one of the most-asked and worst-answered questions in NZ small business IT. Most providers won't quote a number until they've done a paid scoping engagement. Some only quote the licensing and quietly invoice the project work later. Here's a transparent breakdown for a real-world NZ SME migration so you can plan with realistic numbers.

We'll use the example of a fictional 22-person professional services firm in the Waikato — current state: aging on-prem Windows Server, hosted Exchange email, a file share that's groaning, a creaky VPN. Target state: Microsoft 365 with SharePoint for files, Teams for collaboration, Entra ID for identity, and MFA across the board.

The Honest Cost Categories

1. One-Off Project Cost (the Migration Itself)

This is the work to move you. For our example 22-person firm:

  • Discovery & planning (1 week) — $1,800-$2,400
  • Tenant build, security baseline, identity setup — $1,500-$2,000
  • Email migration (22 mailboxes, ~5 years of history) — $1,200-$2,200
  • File migration (file share to SharePoint / OneDrive with permissions) — $1,800-$3,200
  • Device enrolment (Intune setup, 22 devices) — $1,000-$1,800
  • Cut-over weekend (Friday evening through Saturday) — $1,200-$1,800
  • Two weeks of post-cut hypercare — $1,600-$2,400

One-off total: typically $10,000-$16,000 for a 22-person migration of this complexity.

2. Ongoing Licensing

This is the per-month per-user cost going forward.

  • Microsoft 365 Business Standard — approx NZ$26/user/month (covers email, Office apps, Teams, OneDrive, SharePoint)
  • Microsoft 365 Business Premium — approx NZ$42/user/month (adds Defender for Business, Intune, advanced threat protection — recommended for most SMEs)
  • Third-party backup for M365 — approx NZ$5-8/user/month
  • Phishing simulation & training platform — approx NZ$3-6/user/month

For 22 users on Business Premium with backup and training: roughly NZ$1,200-$1,400 per month all-in, going forward.

3. Hidden Costs Worth Knowing

These don't always make it into the headline quote:

  • Internet upgrade — many on-prem environments are on internet plans designed for "check email" usage. Cloud-first usage needs proper fibre. Budget $80-200/month upgrade for most SMEs.
  • Hardware refresh — older Windows 10 / underpowered laptops will struggle in a properly secured cloud environment. Plan for 20-30% of your fleet to need replacing in the first year.
  • Conditional Access licensing — if you go beyond Business Premium for stricter security, plan for Microsoft 365 E3 / E5 or Entra ID P1 / P2 add-ons.
  • Domain & DNS migration — moving your domain to a sensible DNS provider, often $150-400 one-off.
  • Staff time during the project — usually the biggest hidden cost. The migration will pull on your team's time for testing, decisions, and short training sessions. Budget 1-2 days per person across the project.

4. Ongoing Support After Migration

Cloud doesn't eliminate the need for support — it changes its shape. Most NZ SMEs put a managed services agreement in place for $80-160 per user per month covering helpdesk, monitoring, patching, and security. For 22 people that's roughly $2,000-$3,500/month ongoing.

What You Save

The hardware-and-on-prem world had its own costs that disappear:

  • No server refresh every 5-7 years ($8,000-$20,000 each cycle)
  • No server room electricity, UPS replacement, air conditioning
  • No VPN concentrator or aging firewall to maintain
  • Less downtime — cloud platform uptime exceeds what most on-prem setups achieve
  • Genuine work-from-anywhere with no extra effort
  • Improved security baseline that helps your cyber insurance position

Total Cost of Ownership: A 3-Year View

For our example 22-person firm:

  • Year 1: $12,000 (project) + $14,000 (licensing) + $30,000 (managed support) = ~$56,000
  • Year 2: $14,000 (licensing) + $30,000 (managed support) = ~$44,000
  • Year 3: $14,000 (licensing) + $30,000 (managed support) = ~$44,000
  • 3-year total: ~$144,000

Against an on-prem alternative (server refresh, ongoing maintenance, lost time on outages, no proper work-from-home), most NZ SMEs land within 10-15% of break-even on direct cost — but get materially better security, reliability, and flexibility. The numbers only get better at 30+ staff.

What's Different at Different Sizes

  • 5-10 person business: Project usually $4,000-$8,000. Licensing scales linearly. Often the ongoing support cost dominates.
  • 10-25 person business: The sweet spot — project $8,000-$16,000, clear ROI within 2 years.
  • 25-50 person business: Project $14,000-$30,000. More integration work (line-of-business apps, SSO). Strong ROI.
  • 50+: Project $25,000-$80,000+, depending on complexity. Almost always net-positive within 18 months.

Red Flags in Quotes

If you're getting quotes from multiple NZ providers, watch for:

  • Quotes that only cover "the migration" with no hypercare line item. The two weeks after cut-over is where everything actually gets fixed.
  • No mention of third-party backup. Microsoft and Google explicitly recommend it; quotes that skip it are leaving a gap.
  • "Free" migrations bundled with multi-year support contracts. The migration isn't free; it's amortised into the support cost over 3 years, locking you in.
  • Licensing not broken out per-user. Means you can't compare like-for-like.

Getting an Accurate Quote

For a written quote with realistic numbers, a provider needs to know: how many users, what your current email and file storage looks like, whether you have a Windows domain, what line-of-business apps you use, and your tolerance for downtime during cut-over. The discovery phase exists for a reason — beware of providers that quote precisely without doing it.

Tryzee runs cloud migrations for businesses across Matamata, the Waikato, and the wider Bay of Plenty. If you'd like a no-pressure conversation about what your migration would actually cost, get in touch — we'll give you a realistic range in the first call.