TCO Calculator

What is TCO and why is it vital for your software strategy?

The Cost Total Cost of Ownership (TCO) is an essential financial metric that allows companies to evaluate not only the purchase price of software, but all the costs direct and indirect costs associated with its use over a given period. Often, the license price is just the tip of the iceberg.

Using a Calculator for Software License TCO is essential for finance and IT departments, as it allows for a realistic comparison of the Subscription (SaaS) model versus the Perpetual License (On-Premise) model over a 5-year timeframe.

Subscription vs. Perpetual License: Which is more profitable?

The choice between paying a monthly fee or making a one-time initial investment depends on various factors that our tool analyzes in detail:

• Subscription Model: Usually involves a lower initial outlay (OpEx), but the accumulated cost in the long term can be higher. Generally includes support and updates.
• Perpetual License: Requires a strong initial investment (CapEx). Although the software is owned by the company, annual maintenance costs usually appear (typically between 18% and 25% of the license value) to keep support active.

Hidden costs that are often ignored

To obtain an accurate TCO calculation, our calculator integrates variables that are often overlooked in initial budgets:

• Training Costs: The time employees spend learning to use the new tool represents an opportunity cost and, at times, requires investment in external instructors.
• Implementation and Migration: Server configuration, migration of existing data bases, and system customization.
• Maintenance and Support: Expenses derived from security updates, technical patches, and specialized customer support.
• Infrastructure: In the case of perpetual licenses, the hardware and energy costs of local servers must be added.

How to interpret 5-year results

The 5-year analysis is the industry standard for amortizing technology assets. Our tool will show you the break-even point where one model starts to be more expensive than the other, helping you make a decision based on real data and not just the initial selling price.