Question

Assess five sources of cost in the total cost of ownership (TCO) of a piece of Open Source Software, e.g., Wordpress [2]. Include, e.g., cost of implementation, support and license management. Conclude with a brief recommendation with rationale that you might make as an IT manager of where that software might be suitable for use considering your TCO analysis.

Answer 1

ANSWER:

Total cost of ownership also commonly used as TCO, nothing but the cost price of an item as well as the cost of operations. When someone is choosing something or make a purchasing decision, it is important that the buyer must not only look for the item for a short time usage but also must look for the price of the product. This is the basic concept of total cost of ownership, the asset which have less TCO must have a better value.

How to analyze TCO in a business model:

• Suppose as a manager your project requires computers for the project members, so it is important that you analyses the total cost of ownership in implementation of those computers. Based on that you need to check and analyze the certain cost of products such that the product will be useful in long run.
• Analyses the cost of buying the raw machine is not all, you need to install software which also requires licensing and you need to buy several license-based software which actually cost a few bucks.
• Moreover, employee training, transition cost, disaster recovery planning also has some cost which needs to be considered for implementing on a datacenter. Transferring cost those systems to datacenter and setting up those on the datacenter must also be taken into consideration.

After analyzing these costs, as a manager you need to look at the benefits and loss of purchasing those system for you project such that it can be beneficial in the long run. TCO is actually really helpful in giving you an overall estimation of implementation of the datacenter.