Electronic health records (EHRs) are increasingly moving towards cloud‐based web environments. While cloud‐based EHRs claim substantial benefits at reduced cost, little cost‐benefit research exists for dental schools. The aim of this study was to examine the cost‐benefits of a cloud‐based EHR compared to an on‐premise client‐server EHR in the University of Michigan School of Dentistry (U‐M Dent). Data were collected in 2016 from the U‐M Dent cost‐benefit comparison of tangible and intangible factors associated with implementing a new EHR, using the Total Cost of Ownership (TCO) framework from EDUCAUSE. The TCO framework assessed three factors: foundational (overarching aspects: three items), qualitative (intangibles: 56 items), and quantitative (actual costs). Stakeholders performed factor grading, and relative assessment scores were derived for each item as well as the overall factor. The cloud‐based EHR solution received higher foundational and qualitative factor summary scores. The overall cost of an on‐premise solution over a two‐year period was approximately $2,000,000 higher than a cloud‐based solution. Cloud solutions did not carry any hidden costs, while such costs accounted for 8% (~$540,000) of the overall costs of the on‐premise solution. Across the two‐year period, both one‐time and ongoing costs were higher for the on‐premise solution than the cloud‐based solution (by 40.5% and 20.5%, respectively). This study found that a cloud‐based EHR system in the U‐M Dent offered significant cost savings and unique benefits that were not available with the on‐premise EHR solution. Based on cost, the U‐M Dent has made a case for cloud‐based EHR systems.