Total Cost of Ownership

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Total cost of ownership (TCO) considers most IT operational costs.
Particularly, it includes the IT-related expenditures that go beyond the cost of
purchasing infrastructure and applications. It includes costs like Integration
to existing infrastructure, training on the new software, maintenance
requirement, and similar. The major expense categories include

Acquisition Expenses

  • Infrastructure purchases
  • Software acquisition
  • Installation and integration of hardware and software
  • Purchasing research
  • Warranties and licenses
  • License-acquisition compliance
  • Migration

Operation Expenses

  • Infrastructure physical facilities
  • Electricity for physical facilities and infrastructure, cooling, and
    uniform power supply
  • Testing costs
  • Downtime, outage, and failure expenses
  • Security including breaches, loss of brand, and prevention and response
  • Risk management including upgrades, patches, and future licensing
  • License management
  • Business continuity
  • Training
  • Insurance
  • Information technology personnel
  • Software configuration management

Compliance Expenses

  • Insurance
  • Information technology personnel
  • Software configuration management

Long-Term Expenses

  • Replacement
  • Future upgrade or scalability expenses
  • Decommissioning

Wikipedia Link:

Total cost of ownership