The methods for calculating

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Changing the approach to the cost of owning network infrastructure
16.01.2025
When discussing the total cost of ownership (TCO) of a network, it is necessary to move beyond simply justifying costs and arguing for return on investment to assessing the impact on business opportunities, writes Mary Shacklett, president of consulting firm Transworld Data, on Network Computing .

The global network infrastructure market is projected to reach $256 billion in 2028, the Wi-Fi 7 market will surpass $1 billion in 2024, investment in network and cloud security will hit record highs in 2023, and the edge computing market will grow by 1,108% over the next eight years. All of these factors are driving the need to expand network budgets. However, as network planners and managers know, their annual budgets don’t grow exponentially. So what’s the best way to keep up with networking technologies when budgets are tight?

First, let's look at the business factors that drive the need for significant network upgrades.

Technologies such as Wi-Fi 6 and Wi-Fi 7 will enable faster delivery of network services to internal users and provide a virtually unlimited number of network IP addresses for new devices as they become available. Edge computing will continue to be adopted in manufacturing plants, retail stores, and remote offices. New cloud-based network management and security solutions will emerge that enable network virtualization, likely leading to hybrid networks that are part cloud and part on-premises. As these new networking technologies and tools are adopted, network personnel will need to be hired or trained to operate them.

Network managers can make a compelling case for all of austria mobile database upgrades, but at some point the CIO, CFO, CEO, or all three will ask the TCO question: “How much is it costing us to just keep it running now, and if we were to make a major investment in XYZ technology, how long would it take to recoup that investment?”

Components of TSO
In the past, calculating network TCO was relatively simple. You added up the costs of network hardware, software, labor, contractors, service contracts, power consumption, space costs, etc., and then came up with operating expenses and asset capitalization figures. The assumption was that you would gradually replace aging assets or add new ones in any given budget year, but in stages.

The question is, will this approach to defining TCO be sustainable in the long term, given the multiple business drivers associated with edge computing, fast data transport, security and network monitoring that are all vying for investment at the same time?

The answer is no. TCO will not change dramatically, but the elements on which the TCO discussion is built will change.