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Assessment approach capturing all lifecycle costs of a solution, including acquisition, operation, maintenance and risks.
Total Cost of Ownership (TCO) is a comprehensive approach to evaluating all direct and indirect costs over the full lifecycle of a solution. It covers acquisition, operation, maintenance, depreciation, and risks as well as opportunity costs. TCO helps to make long-term costs visible for comparative decision-making.
Sum of all discounted costs over the considered period.
Average yearly costs for operations, support and infrastructure.
Efficiency metric to compare different solutions.
Comparison of long-term on-premises vs. cloud costs including operation and support.
Assessment of license, integration and training costs over a five-year period.
Lifecycle cost analysis including energy, cooling and spare parts provisioning.
Define scope and evaluation period; assign responsibilities.
Identify data sources and collect cost data.
Build cost model, document assumptions and define scenarios.
Perform sensitivity analyses and validate results.
Communicate results and integrate into decision processes.