Fig. 01 · Glossary
Total Cost of Ownership (TCO)
Also known as TCO, Full-Ownership Cost
Definition
Total cost of ownership prices a software decision over its whole life: acquisition or build cost, infrastructure, maintenance and refresh, the people who must own it, and the risk carried. In build-vs-buy decisions the naive comparison - subscription fees minus build quote - routinely understates true ownership cost by a multiple, because years two through five dominate the total.
The build is the cheap part. Maintenance, dependency updates, integration drift, and the salary of the named owner are where owned software actually costs money - and where most insourcing business cases quietly go wrong.
A TCO model that prices years two through five honestly is the difference between an ownership decision and an ownership regret.
Human Renaissance glossary · operator-grade definitions · Research methodology
