Total Cost of Ownership (TCO)

Total cost of ownership is the full lifetime cost of running IT capacity, not just the headline rent or hardware price. It adds up recurring charges, one-time costs and the energy and staffing needed to operate it. In colocation, TCO combines the monthly recurring charge per kW or rack, power billed at metered or committed rates, cross-connects, remote hands, the non-recurring charge at install, and the cost of moving equipment at contract end. Comparing facilities on price per kW alone can mislead: a cheaper site with a worse PUE or an expensive power pass-through may cost more over a 5 to 10 year term. Buyers usually model TCO against building or leasing an own facility and against public cloud for the same workload.