Who Are the Usual Suspects Providing False Information on Software TCO?
Executive Summary
- What entities are providing bad information to the market on TCO?
Introduction
Many entities in the enterprise software space have provided fake or misleading information on TCO calculation.
The Flaws TCO Presentation
Many of the entities in the enterprise software space declare their support for software a total cost of ownership. However, once one evaluates the actual information that these entities, publish and provide to their prospects and customers, it becomes quite apparent that their dedication to the accurate total cost of ownership explanation and calculation is exceedingly small.
This has been our observation.
Not only from performing searches to find what is generally available on software total cost of ownership, but also from interacting with vendors. On this exact topic, general consensus is that total cost of ownership is important. However, it either can’t be calculated, or the entity is interested in putting an exceptionally small amount of effort into its calculation.
How Entities Break Down, in Terms of their Contribution of Intellectual Property to the Topic of TCO for Software
The entities in the enterprise software space are not interested in objective or thorough total cost of ownership calculations, their interest is to provide lip service to the importance of TCO to assert to their prospects that they have the lowest TCO compared to the firm’s that they are competing with. And to put as little effort as possible into determining the total cost of ownership.
Gartner Focused on Improving TCO?
It is widely observed that Gartner introduced the concept of TCO back in the mid-80s.
However, since that time, Gartner has done close to nothing to advance the use of TCO. And in fact, Gartner works against buyers from making better decisions based upon TCO. What is interesting about it is that Gartner emphasizes TCO calculation and drives their customers to the highest cost solutions. This is because Gartner receives the most money from vendors that have the highest TCO. So while they may have popularized TCO, they are driving customers to ignore TCO.
Our TCO Table on Software Entities
TCO Contribution by Entity or Entity Grouping
| Entity | Description of Contribution | Credibility on TCO |
|---|---|---|
| Software Vendors | Ever single TCO estimate we have seen by a software vendor results in them having the lowest TCO. | Low |
| Consulting Firms | Horrible TCO information and calculation. Mostly they do not advance TCO, but simply declare its importance. | Low |
| Gartner | Pushes software buyers to the highest TCO solutions. Generally does not get into TCO quantification. | Medium (With buyers) |
| Forrester | Has produced some of the worst TCO calculations that we have reviewed. | Unclear |
| IT Media | Normally allows consulting firms to simply state the importance of TCO. The journalist typically does no attempt to contribute in any way to TCO. IT media articles typically rely on consulting firms without having anyway of verifying the information they are provided. | Unclear |
Conclusion
- The collective energies that have been placed into TCO development, demonstrate that decades after its introduction as a concept in software decision making.
- TCO has barely made any progress since its initial introduction, and almost all of the effort that’s been placed into TCO has been to simply talk about TCO in the abstract.