How Do I Calculate Infrastructure TCO?

Posted by Centre on August 19, 2014

It is critical to calculate TCO, or total cost of ownership, for your business’s IT infrastructure. Depending on your IT budget, you may find that you can afford more but need less, or afford less and need more.

Your business’s needs, ultimately, should be the deciding factor when selecting an IT solution, but the first step is to calculate TCO. After you calculate TCO for in-house infrastructure, you can discuss this amount with your local IT solutions provider to ensure a return on your investment (ROI).

How to Calculate TCO: Acquisition Costs

The first part of calculating TCO is to assess how much it will cost to acquire:

  • Hardware (Computers, monitors, etc.)
  • Core Application Software (Operating systems, etc.)
  • Network Gear (Ethernet cables, network adapters, routers, etc.)
  • Storage

The final sum of acquisition costs may deter some business from investing into IT because of the high up-front cost. However, a business can protect their investment into IT when they select an IT solutions provider that protects that initial investment.

How to Calculate TCO: Operational Costs and Long-Term Costs

Keeping your IT infrastructure in-house will require both operational and long term costs.

Operational costs include every practical cost associated with running IT in-house. This may include:

  • Electricity
  • Staff
  • Internet
  • Security
  • Insurance
  • Back-up
  • Cloud storage
  • Downtime

When you calculate TCO for your in-house IT department, remember that IT is a long-term investment, with long-term costs that include repairs and future upgrades.

What if the calculated TCO is higher than the ROI?

After you find the sum total of acquisition, operational, and long-term costs of owning your own IT infrastructure, you may think that your business cannot afford high-quality IT solutions. Centre Technologies would like the opportunity to prove you wrong.

Option 1: Our certified consultants can create a customized Network Consulting solution that is scalable to the growth of your business. This saves your business money in the long term for your in-house IT infrastructure.

 Option 2: If you want your business to have the capabilities of a full-scale IT department for one monthly cost, you can outsource your IT entirely to Managed Services by Centre Technologies.

If it’s difficult for you to calculate TCO for IT infrastructure, or if you can not decide which IT solution is right for your business, contact a certified consultant at Centre Technologies for more information.

Topics: TCO, Latest In Technology, total cost of ownership, Featured

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