Your browser cannot play this video. How Does Total Cost of Ownership/TCO Compare to Price? Total cost of ownership/TCO highlights the difference between purchase price and long-term cost. This analysis came into the spotlight starting in the mid-eighties due to the expenses in supporting hardware and software IT acquisitions.
There are three key components to TCO calculations: Let’s look at each of these in turn. Acquisition/Physical Hardware costs include the cost of equipment or property before taxes, but after commissions, discounts, purchasing incentives, and closing costs.
There are three key components to TCO calculations: Acquisition/Physical Hardware Costs. Operating Costs. Personnel Costs.
Purchasing & Procurement. Total cost of ownership (TCO) is an analysis that places a single value on the complete lifecycle of a capital purchase. This value includes every phase of ownership: acquisition, operation, and the softer costs of change management that flows down from acquisition such as documentation and training.
Watch the Video Below for a Quick Understanding of How TCO Affects Purchasing Decision, Before Continuing Below.
Acquisition/Physical Hardware costs include the cost of equipment or property before taxes, but after commisions, discounts, purchasing incentives and closing costs. Sometimes this will include one-time peripheral equipment or upgrades necessary to installation or utilization of the asset.