Cloud computing’s elusive TCO

Grazed from GigaOM.  Author: David Linthicum.

Total cost of ownership, or TCO, is a formula that assesses direct and indirect costs and benefits related to the purchase of any IT component. The goal is a final figure that will reflect the true purchase price, all things considered.

For instance, if I leverage a public cloud, my reoccurring costs go up since I now pay subscription usage feeds. However, the amount of money I pay to buy and maintain hardware and software should go down, or go away entirely. Thus, the TCO of cloud is the adjustment in direct and direct costs and benefits as a result of using cloud…


The trouble with TCO as it pertains to cloud computing is that the models require an understanding of the true value of cloud-based technology. This is much more complex than most enterprises realize. There are more moving parts that need to be assessed, as well as benefits that are there, but hard to define and determine. I propose we think differently about cloud computing and TCO…

Read more from the source @ http://research.gigaom.com/2014/05/cloud-computings-elusive-tco-total-cost-of-ownership/