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Prudent enterprises are reviewing and optimizing their IT resources and practices to maintain a
competitive edge in today's global economy. The current economic climate has accelerated the
underlying structural shifts in IT usage and delivery models, driving IT purchasing decisions to be
critically evaluated at multiple levels and CFOs to emphasize the decapitalizing of IT. It is, therefore, little wonder that the majority of organizations are looking at total cost of ownership (TCO) as one of the metrics to ascertain the impact of any IT investment on their overall financial bottomline. TCO is a measurement of the total life-cycle costs of an IT investment, including acquisition, implementation, management and retirement. This IDC Analyst Connection takes a closer look at the key parameters in establishing the appropriate financial objectives in an organization's decision-making framework. The document also explains why CIOs should stop focusing on the initial capex costs and pay greater attention to the more significant life-cycle costs to operate, manage and run a particular technology. Other indirect costs like user productivity and soft issues like ease of use are also key factors to consider when determining the TCO of operating systems.