Sources of Cost (Cont.)
Net Cost of Ownership (NCO)
- An alternative to TCO; also called as “real TCO”
- Measures only direct costs
- Leaving out so-called “wasted” time
- NCO costs per computer: between $1500-$3500
- Net management for a 100-user network require an annual budget of between $150,000 - $350,000
- Largest network budget items (with NCO):
- Personnel cost, accounting for 50-70% of costs
- WAN circuits
- Hardware upgrades and replacement parts
- Important message: Focus should be on ways to reduce personnel time, not hardware costs