Network Hardware: Thinking About Total Cost of Ownership?

There is a lot of talk about total cost of ownership ( TCO) in the network hardware world.  It is way to look at your purchases and understand the real life costs from purchase to disposal.  The reason people look at total cost of ownership?
There is a difference between the price of your hardware and the long term costs associated with that hardware.

  • Aug 3, 2011
  • Rick

TCO - total cost of ownership

 

Gartner defines total cost of ownership (TCO) a comprehensive assessment of information technology (IT) or other costs across enterprise boundaries over time. For IT, TCO includes hardware and software acquisition, management and support, communications, end-user expenses and the opportunity cost of downtime, training and other productivity losses.

At CXtec we agree that total cost of ownership is a way to look at your purchases and understand the real life costs from purchase to disposal.  The reason people look at total cost of ownership?
There is a difference between the price of your hardware and the long term costs associated with that hardware.

How so?

There are hard costs and soft costs that are involved from planning and deployment to operation to decommission.  Some products simply have a higher cost of ownership than others.

In the world of switches, routers, phones, wireless and security appliances, cost of ownership can also depend on what company you choose as a partner.

So what kind of costs of are we talking about?  Here are some examples to get you thinking.


  • Labor / paid hours

  • Research

  • Installation

  • Updating systems due to incompatible tools

  • Training / hiring staff

  • Making changes based on unforeseen consequences

  • Maintenace / hardware replacement services

  • Opportunity cost

  • Disruptions during migration

  • Power costs

  • Disposal


Some companies take this into consideration and offer solutions to lower total cost of ownership.  They understand your business and take steps to provide products and services throughout your network hardware lifecycle.

This is something you should think about as soon as you begin the planning phases of a project that involve acquiring hardware.   It can save your company a lot of money and make your life a lot easier.