The total cost of ownership (TCO) is the sum of all costs associated with owning and operating your IT infrastructure, from hardware to software. Understanding TCO is crucial for data center operators because it helps them understand their financial risk and make better decisions about how to run their facilities more efficiently.

What is the Total Cost of Ownership?

The total cost of ownership (TCO) is the cost of owning and operating a product or service over its useful life.

It includes all costs associated with acquiring, owning, and using the item, including acquisition price, operating expenses such as maintenance and repair costs, replacement costs for wearing parts (for example, tires on a car), disposal costs at end-of-life and any initial cost savings resulting from lower energy consumption or better productivity. A common misconception about TCO is that it means “purchase price” only, but this is not true since many items have no purchase price (e.g., free software).

What are the causes of high TCO?

You can reduce your TCO by:

  • Reducing the power consumption of IT equipment. Power consumption is a significant cause of high TCO and causes more energy-efficient servers and storage devices. It’s also essential to ensure that all devices are configured appropriately for their workloads, which will help reduce power consumption and increase efficiency overall.
  • Optimize cooling systems to operate at peak efficiency while minimizing noise levels (more on later). This system might involve adding more fans or installing additional air conditioning units if necessary. However, it’s worth noting that many data centers already have plenty of excess capacity in their cooling systems–so feel free to take advantage!
  • Ensuring proper maintenance schedules follow by all staff members who work in your facility, including those responsible for cleaning up after yourself after eating lunch at your desk every day 🙂 It would help if you also considered implementing automated processes around routine tasks like replacing failed components. Hence, as saves time doing manual labor when there are better things we could do together instead.

How can I reduce TCO?

There are several ways you can reduce TCO:

  • Reduce the power consumption of your data center. The more efficient your facility is, the less money it will cost to run. There are many ways to do this–from using more efficient servers and networking equipment (such as 10GbE) to powering down servers at night or during off-hours when they aren’t needed.
  • Reduce the amount of floor space you use by consolidating racks and other equipment into fewer cabinets or rooms where possible. Using frames will also make it easier for technicians who need access to those cabinets/rooms because they know exactly where everything is located rather than having to search multiple areas looking for what they need!
  • Reduce cooling costs by installing efficient air conditioning systems that use less energy while keeping servers cool enough. They don’t overheat due to excessive heat generated by their components inside those enclosures containing all sorts of CPUs/RAM/HDDs.

Data center operators need to understand the total cost of ownership and implement strategies to reduce it.

Data center operators need to understand the total cost of ownership and implement strategies to reduce it.

There are several reasons why this is important:

  • It helps you reduce costs by ensuring that the equipment you buy will last longer than its warranty period, saving thousands in maintenance costs over time. Use equipment with good reliability ratings (like those from UL) and ensure that it’s properly maintained so it doesn’t break down unexpectedly.
  • Knowing what’s involved in running your data center lets you negotiate better prices with vendors when buying new hardware or software licenses. For example, if they know how much power their product uses on average per year, they may be willing to offer some rebate based on how much Carbon Dioxide emissions would be saved by switching over from older models.

Read more about Network Neutral Data Center Benefit to Prevent Downtime.


The total cost of ownership is one of the most important factors to consider when looking at your data center. It will help you understand how much money you are spending on electricity, maintenance, and other expenses so that you can find ways to reduce those costs.

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