Total Cost of Ownership

Total Cost of Ownership (TCO) represents the sum of operating expense (OPEX) and capital expenses (CAPEX).

OPEX

It's the recurrently money spent by an entity (organisation, corporation, private) to run a service or system. Think of it as a “pay by operation” model.

It represents the day-to-day expenses, such as license fees, electricity, insurance, etc.

CAPEX

It's the investment/base cost spent by an entity (organization, corporation, private) to buy, maintain, or improve fixed assets (buildings, vehicles, etc.).

CAPEX can’t be deducted during the year and must be capitalized. It can represents computer, network and server hardware/software.