Total Cost of Ownership

Total Cost of Ownership - Total Cost of Ownership (TCO) TCO...

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Total Cost of Ownership (TCO)
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TCO – what is it? Total Cost of Ownership Defined - a type of calculation or business concept designed to help IT managers assess both direct and indirect costs related to the purchase of any IT component, service, or system. It is the actual cost associated with any IT system and includes one-time and ongoing costs. TCO is also sometimes referred to as total cost of operation but is not 100% accurate. Operation does not factor in first time costs such as hardware and software purchases. TCO analysis was popularized for the Gartner Group in 1987 but existed far before then. The Gartner Group is an information technology research and advisory firm.
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TCO Concepts Over the course of years, it has been proved that the cost of hardware represents about 15% of the total cost of an IT asset, while support costs are typically as high as 70% to 85% of the total cost. TCO concepts can be applied to almost anything we purchase and use Homes, Cars, Electronics
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TCO – iPhone in 2007 http://www.wired.com/gadgetlab/2007/06/iphone-total-co/
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Example: TCO For Owning A Car Some of the key data elements used to the cost of ownership for car include: Fuel Costs Insurance Financing (interest you pay when you purchase a car) Fees and Taxes Maintenance Costs Depreciation Value
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TCO Calculation For Owning A Car Purchase Price $25,000.00 at 4% interest for 60 months payment
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This note was uploaded on 12/13/2011 for the course IST 346 taught by Professor Rieks during the Fall '11 term at Syracuse.

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Total Cost of Ownership - Total Cost of Ownership (TCO) TCO...

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