🛡️ RISK BADGE: 💰 FINANCIAL REALITY
Executive Summary: What is it?
Total Cost of Ownership (TCO) is the calculation of the real cost of software, not just the license fee. For Open Source, it is the sum of: License (usually $0) + Infrastructure (Hosting) + Maintenance (Engineering Hours) + Security Ops.
CFO / Business Impact: What does it cost/risk?
The "Free" Illusion. Self-hosting saves on License Fees but increases OpEx (Operational Expenditure). A $0 tool that requires 5 hours of engineering time per month costs you ~$500/month.
Technical Reality: How does it work?
- SaaS: High License, Zero Maintenance. Predictable.
- Self-Hosted: Zero License, Variable Maintenance. Cheaper at scale, expensive at start.
- Formula:
(Hours/Month × Hourly Rate) + Server Cost = TCO.
💡 Executive FAQ
- Q: When is Self-Hosting cheaper?
- A: Typically when you have >50 users. SaaS per-seat pricing ($20/user) scales linearly ($1000/mo). Self-hosting scales logarithmically (server cost stays flat until you hit massive scale).
- Q: Can we ignore TCO for small tools?
- A: No. "Zombie Servers" (forgotten instances) accumulate costs and security risks.