Glossary · General
Total Cost of Ownership (TCO)
The real cost of a system over the years, not just the purchase price.
Total Cost of Ownership, or TCO for short, is the full cost of a system over its entire lifetime. It covers not only what you pay at purchase, but everything that comes after: maintenance, updates, training, management and, one day, replacement.
The purchase price is often just the tip of the iceberg. A cheap system that needs a lot of maintenance or that nobody can get to grips with will cost you more in the long run than a more expensive choice that runs smoothly. Only when you factor in the years do you see the real cost.
Thinking in terms of TCO helps you compare systems fairly and avoid surprises. It is a standard part of a good business caseThe reasoning behind why an investment is worth the effort and the money.: not what does this cost today, but what will this cost us over the coming years.
