Total Cost of Ownership
The full cost of a solution over time, including hidden costs like power, cooling, and staff.
Total Cost of Ownership (TCO) accounts for every expense tied to a workload over its lifetime, not just hardware prices, but also power, physical space, cooling, network hardware, and the IT labor needed to maintain on-premises infrastructure. Microsoft’s free Azure TCO Calculator quantifies these hidden on-premises costs and compares them against equivalent Azure workloads. A common exam confusion is mixing up the TCO Calculator with the Pricing Calculator: the Pricing Calculator estimates what Azure services will cost, while the TCO Calculator is used before migration to justify the business case by showing how much on-premises spending Azure can eliminate.
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