NextGen ASP and Hosting
 

 

Total Cost of Ownership

NextGen ASP

Total Cost of Ownership (TCO) is a financial estimate intended to aid business owners review both direct and indirect costs typically related to software or hardware. TCO is a type of full cost accounting. You will be paying all the elements listed below – you just may not be aware of the costs until the bills are coming in after the initial purchase has taken place. With NextGen ASP, the vast majority of direct and indirect costs are designed into the single monthly fee.

 

Overview

Total Cost of Ownership for NextGen ASP

TCO breakdown was made known by the Gartner Group  in 1987. TCO works to provide a statement on the total financial impact of deploying information technology systems during the entire life-cycle of the solution.

 

IT deployment can include most or all of the following elements. I have highlighted in yellow those elements that are managed for you with our NextGen ASP TCO:

  • Software license purchase costs

  • Hardware and Software Implementation / deployment costs

  • Server Hardware warranties and maintenance costs

  • Software license tracking costs

  • Lost productivity of employees waiting on IT to resolve their problem

    • Gartner Group estimates this intangible represents 56% of overall TCO

    • One phone number to call to resolve all support issues

  • Operations Infrastructure Costs

  • Infrastructure (floor space) costs

  • Cost for electricity and cooling

  • Server hardware and software costs

  • Testing costs

  • Cost to upgrade or scalability

  • Senior Level Management Time costs

  • CIO Management costs

  • Backup and Recovery Process costs

  • Costs associated with failure or outage

  • Diminished performance incidents (i.e. users having to wait)

  • Costs of security breaches (recovery costs)

  • Technology training costs of IT staff.

  • Audit costs

  • Insurance costs

  • Replacement costs

  • Migration costs

  • Decommissioning costs

  • End-user computer Hardware purchase costs

  • LAN Network hardware and software costs

TCO is also known as total cost of operation. When incorporated in any financial benefit analysis (e.g., ROI, IRR, EVA), TCO often provides the cost basis for calculating the economic value of the investment.

 

The automobile industry has seen wide use of the concept of TCO. In this industry, TCO represents the cost of owning a vehicle beginning with the purchase, through its maintenance, and finally as its sale as a used car.