Inference Economics of Enterprise Coding Agents: Cloud vs. On-Premise LLMs

Jul 16, 2026

A longitudinal case study compares API-based Claude Opus with on-premise GLM-5.1/5.2 for enterprise coding agents over two 28-day periods. Prompt caching achieved a 99.3% hit rate, reducing API costs by 88.6% to $0.57 per million tokens, which is lower than the amortized unit cost of the on-premise solution. While on-premise deployment saved 40.1% of total cost of ownership (TCO) under shared GPU allocation, it resulted in a higher defect-repair burden, with a Fix Commit Ratio of 74.9% versus 45.9% for the API-based approach.

Why it matters: This study provides empirical data on the cost and quality trade-offs between cloud and on-premise LLM deployments for enterprise coding agents, offering practical insights for infrastructure decision-making.

Full story at: arXiv Software Engineering ↗