• Aaron Magruder

Total Cost of Ownership (TCO)


This subject is a little off topic for this blog but Total Cost of Ownership should be part of any technology purchasing decision, it is important. What is this going to cost me 3-5 years for now or even next month. As a small or medium business (SMB), many times you want to purchase your own computers, switches, firewalls, access points, storage and configure it yourself. Rightfully so, it can save you money. So you go to your local Best Buy, CompUSA, Wal-mart or what ever and buy the device that suites your needs, take it back to your office and set it up. Maybe the setup goes smoothly, works out of the box with no issues. Maybe not, and you spend the last 4 hours of your day trying to figure it out and a few hours each day for a few weeks. But in the end, it worked. By now you have 24 hours or 3 full business days of your valuable time getting this device working. 2 Months from now, you decide that you need to be able to access your office remotely but the wireless router you purchased doesn't support vpn so you go back to your favorite store and buy a device that supports this function. After another $125 and 3 days you get this one working. You're in great shape again. 13 Months after your last purchase the device fails and won't power up. Warranty was 1 year so you are back to the store and find out that they don't sell that model any longer. This is all worst case scenario but you get the picture, if you don't factor in TCO, even small IT purchases of $100 or less could turn out to be a $500 purchase and weeks of your time that could be spent with customers. Talk to your technology company to get some general advise on device purchases. Managed equipment that has support services and advanced hardware replacements are always a good idea. With support services you can call the manufacture for general configuration assistance and if it fails, they will replace it (as long as you pay the yearly maintenance). They may even be able to save cost on hardware purchases over Best Buy, CDW, etc... Keep the following points in mind when factoring in TCO:

  • Does this product have yearly maintenance that can be purchased? Software updates and advanced hardware replacement?

  • Are there qualified people in my area that can assist with the configuration so I can spend my time working with customers?

  • What expansion and integration points are in the product? The product should not be maxed out in licensing when purchased and should be able to integrate into other technology services in the future.

  • How long is the product going to be supported? Linksys, D-Link, etc have shorter lifecycles that Cisco Systems. If the product is not expandable or supported, this lead to replacement or migration cost.


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