How to Calculate Your Server TCO?

With the current focus on fiscal responsibility and due diligence, CIO’s and IT executives have indicated that more than 80% of current IT purchases require financial analysis for justification. In an effort to to justify the use of server virtualization platforms, I devised a model for assessing the 'Total Cost of Ownership' (TCO) of any production (server) environment. TCO analysis for the server park should ideally be done for a period of 4 years since the estimated lifetime of a server is 4 years. Yearly / monthly TCO can thus be obtained to get a fair idea of how much is being spent yearly / monthly. Following are the major points on which the TCO calculations are based:

Hardware Costs

• Cost of physical servers
• Cost of processor/RAM upgrade
• Cost of extra storage devices
• Cost of SAN
• Cabling cost
• Cost of racks

Software Costs

• Cost of OS
• Cost of anti-virus s/w
• Cost of backup s/w
• Cost of server management software (NetIQ etc.)
• Cost of other softwares

Vendor Support

• Cost of service agreements
• Cost of warranties

Setup & Maintenance

• Cost of setup of servers
• Cost of installation
• Cost of maintenance
• Cost of training
• Cost of consultancy

Facility Costs

• Power & cooling costs
• Flooring costs

The TCO thus calculated may then be used to model typical data center strategies and best practices of specific alternative server and operating system solutions. The calculations should be performed using comparable competitive scenarios.