Glossary · T
Total Cost of Ownership (TCO)
Total Cost of Ownership
The cost of an asset over its full lifecycle
What it means
Total cost of ownership includes the direct and indirect costs of acquiring, operating and eventually replacing or retiring an asset. For software, it can include implementation, integration, hosting, licences, maintenance, training and migration.
What it means for a business
When comparing systems, a business can estimate costs over the same period and include internal staff time as well as supplier charges. A lower purchase price may be offset by higher operating or migration costs, so assumptions should be reviewed alongside the total.