Foundations - The IT Blog for SMB

Foundations - The IT Blog for SMB

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The Hidden Cost of IT Decisions - Technology TCO

Posted by Alden Gleason on November 6, 2017 9:38:57 AM CST
Small and mid-sized organizations are regularly faced with technology decisions. Unfortunately many times we evaluate these decisions at their face value. How much does it cost to replace it? What is our budget for a computer or server? 

While this approach helps lower costs initially, it generally increases your cost over the assets lifetime. This cost creep is under-estimated, under-reported and under-accounted for.  When looking at purchasing IT Assets its important to balance the CapEx (Capital Expenditure) and the OpEx (Operating Expenditure). The combination of the two make up your TCO.

Total cost of ownership (TCO):
The upfront cost of a product or service and the direct and indirect costs incurred during its lifetime.

Many buyers considering an IT infrastructure upgrade can fall into a pattern of using upfront cost as their key criteria. Not only does this inadvertently neglect potential products or solutions that may be much better suited, but in the long run may actually end up costing a lot more.

Dont believe us? Gartner estimates that 80% of total IT costs occur after the initial purchase (OpEx). 

Texas 24 can help you find the right technologies for your organization. Schedule your free evaluation today. 

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Topics: IT Cost, CapEX, OpEX, TCO, Total Cost of Owenership, Tech Cost, Technology Purchasing