Tooling Total Cost of Ownership Model
Tooling Total Cost of Ownership Model
Section titled “Tooling Total Cost of Ownership Model”Use this model to calculate the 3-year TCO for any tool under evaluation. Compare across shortlisted tools — the tool with the lowest Year 1 cost is frequently not the tool with the lowest 3-year TCO.
Tool: Category: Prepared by: Date:
Year 1: Adoption Cost
Section titled “Year 1: Adoption Cost”| Cost Component | Estimate | Basis |
|---|---|---|
| Licensing / subscription (Year 1) | Annual fee or first-year cost | |
| Integration development | Engineer-weeks × rate to build integrations with toolchain | |
| Initial configuration and setup | Engineer-days × rate to deploy and configure | |
| Training and skills acquisition | Training costs + lost productivity during learning curve | |
| Infrastructure (compute, storage, hosting) | If self-hosted: server/VM cost; if SaaS: included in licensing | |
| Proof-of-concept / evaluation | Time already spent; include as sunk cost | |
| Year 1 Total |
Year 2: Steady-State Cost
Section titled “Year 2: Steady-State Cost”| Cost Component | Estimate | Basis |
|---|---|---|
| Licensing / subscription (Year 2) | Renewal cost (note any multi-year discounts) | |
| Operational overhead | Engineer-hours/month × rate × 12; who runs this in production? | |
| Enhancement development | New integrations, feature additions, adaptations | |
| Major upgrade effort | If a major version upgrade is likely in Year 2 | |
| Support costs | Vendor support contract if applicable | |
| Year 2 Total |
Year 3: Maturity Cost
Section titled “Year 3: Maturity Cost”| Cost Component | Estimate | Basis |
|---|---|---|
| Licensing / subscription (Year 3) | ||
| Operational overhead | As Year 2 | |
| Enhancement development | Likely lower than Year 2 as platform matures | |
| Upgrade / migration effort | If platform evolution requires migration work | |
| Year 3 Total |
3-Year TCO Summary
Section titled “3-Year TCO Summary”| Year | Cost |
|---|---|
| Year 1 | |
| Year 2 | |
| Year 3 | |
| 3-Year Total | |
| Annualised average |
Hidden Cost Checklist
Section titled “Hidden Cost Checklist”These costs are frequently omitted from initial estimates. Confirm each has been considered.
- Key-person dependency: Is operational knowledge of this tool concentrated in one or two engineers? What is the cost if they leave?
- Vendor lock-in: How difficult is it to migrate away from this tool if circumstances change? What would that cost?
- Compliance overhead: Does this tool introduce additional compliance requirements (data residency, access logging, vendor assessment)?
- Scaling cost: If the estate doubles in size, does the tool cost double? Does it require additional infrastructure?
- Security overhead: Who manages credentials, certificates, and access controls for this tool?
- Documentation debt: Who maintains the documentation for how this tool is configured and operated?
Comparison Table
Section titled “Comparison Table”| Tool | Year 1 | Year 2 | Year 3 | 3-Year TCO | Notes |
|---|---|---|---|---|---|
Recommended option:
Primary reason:
Key risk with this choice:
Network Automation Handbook —
Patrick Lau
This work is licensed under a Creative Commons Attribution-NonCommercial license.
You are free to use and adapt this material within your organisation for internal purposes. Republishing, selling, or distributing this content (in whole or in part) as a book, course, or other commercial product is not permitted without explicit permission.
This work is licensed under a Creative Commons Attribution-NonCommercial license.
You are free to use and adapt this material within your organisation for internal purposes. Republishing, selling, or distributing this content (in whole or in part) as a book, course, or other commercial product is not permitted without explicit permission.