Gartner Research

The Four Laws of Application Total Cost of Ownership

Published: 03 April 2012

ID: G00230382

Analyst(s): Andy Kyte

Summary

Business applications are the primary mechanism for delivering IT value. Applications are expensive to acquire, but even more expensive to own. Application total cost of ownership is the immutable core at the center of the IT budget and demands detailed attention from all IT managers.

Table Of Contents

Analysis

  • The First Law of Application TCO
    • All Application Capital Expenditure Creates Both Application Operating Expenditure and the Need for Future Application Capex
    • Actionable Advice
  • The Second Law of Application TCO
    • The Actual TCO of an Application Is the Outcome of Design Decisions and Life Cycle Management Decisions
    • Actionable Advice
  • The Third Law of Application TCO
    • Application Costs are Lumpy
    • Actionable Advice
  • The Fourth Law of Application TCO
    • The Costs for Large Volatile Applications Will Tend to Increase Exponentially Over Time
    • Actionable Advice
  • Bottom Line

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