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What is cybersecurity TCO and why does it matter?

NetworkTigers discusses cybersecurity TCO.

Investing in cybersecurity is crucial in today’s modern landscape. However, in order to do so effectively, one of the most important things to understand is cybersecurity TCO. Accounting for TCO can help you make informed decisions about cost, setup, efficacy, and the longevity of systems. 

What is Cybersecurity TCO?

TCO stands for Total Cost of Ownership. There are many factors that need to be accounted for in order to fully understand the TCO of a cybersecurity installation.  

TCO could be a comprehensive assessment of the information technology landscape of your company over time. It can also be broken down per security structure, in order to calculate and justify the possible return on investment. 

Understanding TCO

TCO is much more than the price tag up front of upgrading to a new system, or hiring a new IT manager. Cybersecurity is a complex field, and many factors may be included when assessing TCO. When making decisions about your cybersecurity networks, there are some ways to shape and understand your TCO so as to “hack” your own upgrade expenses. 

Aiming for a lower TCO may mean investing in slightly more expensive equipment at the start. It may also mean choosing less expensive refurbished gear, and investing those financial savings in extended user training to reduce overall error. There is no one right way to reduce TCO in cybersecurity. However, by understanding what to account for in your calculations, information technology can be chosen with the most effective path forwards in mind.

What is Included in TCO?

Some examples of what to look for when accounting for TCO include:

Equipment Cost

The initial cost of equipment is the easiest to factor in when it comes to understanding TCO. The sticker shock of purchasing new cybersecurity equipment often gives consumers pause when deciding to invest in upgrading their operating systems. However, by choosing quality refurbished equipment, businesses can lower their overall TCO by reducing the upfront cost. The lower price tag of refurbished cybersecurity gear not only leads to lower initial expense, but a reduced total cost of ownership over time. 

Service Costs

Some cybersecurity gear has a higher operating cost over time. Programs that are difficult to install or use, networks that require extensive upkeep, or especially skilled IT professionals to maintain, will have higher service costs than others. 

Warranties may reduce overall service costs, lowering your TCO. Additionally, choosing gear without annual licensing fees can also reduce your upkeep expense over time. 

Training

Researchers at Stanford University estimate that approximately 88% of data breaches arise because of human mistake, or user error. The data also shows that employees are less willing to admit to or catch their own mistakes when in environments that will judge them harshly, or impose severe consequences. A punitive work environment, as well as lack of user training, are two main hurdles to ensuring that costly cybersecurity equipment can work as promised.

When selecting cybersecurity gear, it is crucial to bear in mind who will actually be in charge of implementing and using the software. If extensive training will be necessary to make even lower-cost gear work as promised, the overall TCO will be higher than expected. 

Calculating Hidden Costs

In order to calculate TCO, you must assess the purchase price of an asset (ie, a new firewall system) plus the added costs of operation. This equation will give you a more full financial picture of the true cost of the purchase, and how much value it can add to your organization balanced against the total cost of investment. 

One unforeseen hidden cost that comes from not investing in upgraded cybersecurity measures is lack of consumer or business-to-business trust. A loss of confidence in data protection can be deadly for a business. When assessing the total cost of an upgrade, a balanced analysis will also account for the risk of not upgrading as well. Data breaches are costly experiences not only in terms of real dollars – they also take a toll on a business’s overall credibility and brand worthiness. 

Examples of Comparative TCOs

In cloud-based systems, there are often very low up-front costs. Implementing most internet cloud-based systems has a starting cost of zero. Additionally, the cost of user training may be lower, as many employees might already be familiar with certain cloud-based operating systems. However, the cost down the road of expanding can be higher, as storage fees can rise with certain cloud-based systems. 

Why Does TCO Matter?

TCO can be used to:

  • Justify the cost of upgrading cybersecurity equipment
  • Make smart choices about the overall cost of financial decisions
  • Protect and preserve consumer, client, and inter-business trust
  • Create a shortlist of comparative investments 

Additionally, by investing in refurbished equipment, businesses can significantly lower their overall TCO, taking a more streamlined and cost-effective approach to cybersecurity. 

Budget-friendly cybersecurity is possible, and TCO is a method of maximizing your total IT spend. Assessing total cost of ownership, as opposed to just sticker cost, of cybersecurity methods can help businesses make the smartest possible decisions for their needs and account for lasting longevity and growth. 

Sources

Gabrielle West
Gabrielle West is an experienced tech and travel writer currently based in New York City. Her work has appeared on Ladders, Ultrahuman, and more.

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