Price vs. Total Cost of Ownership

When planning any project, one of the first questions is, “How much will this cost?” It’s a valid question – you need to know what options are within budget and taking cost into account often has a big impact on final decisions.

While cost is important, it’s also important to understand the difference between price and total cost of ownership. Price is the number you see on a quote, but it doesn’t necessarily take into account cost-benefit analysis or factor in ancillary costs that are always in the background.

Take desktops for example. A laptop has a price tag, but that’s not the total cost of ownership for supporting that device. You have to:

• Purchase the laptop
• Purchase the necessary software or licensing for that desktop
• Pay IT staff to provision and support the desktop
• Pay for software and licensing upgrades and renewals
• Eventually replace the laptop

Simply ordering the cheapest laptop on the market may lower total cost of ownership, but it won’t be the final price tag for the initiative. (Not to mention a low cost machine like a Chromebook might not have enough computing power for the intended use case.)

Understanding the total cost of ownership when deciding how to support desktops is particularly important as traditional laptop provisioning versus implementing virtual desktops is not a true apples to apples comparison. While the solutions ultimately provide a similar result (end uses have a desktop) the surrounding requirements and support are much different, drastically effecting total cost of ownership.

Total Cost of Ownership for Desktops & VDI walks through the different factors to consider when calculating estimated TCO and explains how each will effect the ultimate cost. It also includes a complementary worksheet that can be used to document your current and anticipated needs to arrive at a deeper understanding of your desktop initiative. This TCO calculation should be used to honestly evaluate every desktop solution you’re considering so you can make an educated decision that will grow with your organization without unanticipated monetary surprises.

While cost is almost certainly going to be one of the criteria you judge IT initiatives on, it’s important to have a full-picture understanding of the total cost of ownership instead of getting memorized by a smaller (but incomplete) price tag.