Practical Use of Total Cost of Ownership (TCO) and Pricing Calculator for Cost Management.

A Total Cost of Ownership (TCO) and Pricing Calculator is an essential tool for effective cost management, especially for businesses looking to make informed financial decisions. The TCO calculator helps organizations understand the complete cost associated with acquiring, operating, and maintaining an asset over its entire lifecycle. This includes initial purchase costs, operation, maintenance, and any potential disposal costs. By providing a comprehensive view of expenses, it allows businesses to compare different options and choose the most cost-effective one.

On the other hand, a Pricing Calculator assists in determining the appropriate pricing strategy for products or services. It takes into account various factors like production costs, market demand, competitor pricing, and desired profit margins. By using a pricing calculator, companies can ensure that their pricing is competitive yet profitable, helping them to achieve their financial goals while remaining attractive to customers.

Together, these tools empower businesses to manage their costs efficiently, optimize their pricing strategies, and ultimately enhance their profitability and sustainability.

This blog will delve into the powerful tools of TCO and Pricing Calculators, providing a comprehensive guide to their utilization for optimized cost management.

PART 1: USING TCO CALCULATOR

STEP 1: Navigate to the TCO Calculator

• Open a new tab in your web browser and type TCO Calculator.

• Click on 'Total Cost of Ownership(TCO) Calculator (Microsoft Azure)

STEP 2: Define your Workload

1. Servers:

• Click on 'Add server workload'

- Workload 1:

1. On the drop down menu of 'Operating system', choose 'windows'.

2. Leave other parameters at default and Click on 'add server workload' below.

- Workload 2:

1. On the drop down menu of 'operating system', choose 'Linux'

2. Leave other parameters at default.

Step 3: Databases

• Click on 'add database'

Database 1

1. On the drop down menu of Database, select Microsoft SQL server.

2. On the drop down menu of operating system, select 'windows'

3. Leave other parameters at default and click on '+' on your right to clone and take you to 'database 2'.

Database 2

1. On the drop down menu of Database, select Microsoft SQL server.

2. On the drop down menu of operating system, select 'Linux'

3. Leave other parameters at default

Step 4: Storage:

• Click on 'Add Storage'

• Leave other parameters at default

Step 5 : Networking

• On the drop down menu Under 'Destination Region', choose 'North Europe'

• Leave other parameters at default

• Click on 'Next'

Step 6: Adjust Assumptions

• Leave 'Adjust Assumptions' at default

• Click on 'Next'

Step 7: View Report

• The Pricing Calculator will display the estimated yearly/over 5years cost for each configured service.

• Review the cost breakdown to understand the components of your Azure bill.

• You can see the difference between running our workloads on premises and on Azure below: Whereby the green signifies Azure cost overtime and blue is on premises cost.

Step 8: Consider alternatives:

• Compare the TCO of your current Azure setup with potential alternatives (e.g., different Azure regions, service tiers, or on-premises solutions)

Step 9: Save/Share Your Estimate

• You can save your estimate for future reference or share it with colleagues by exporting it as a PDF or Excel file.

• To save the estimate, click "Export" and choose the desired format.

PART 2: USING AZURE PRICING CALCULATOR

1. Click on 'Azure pricing Calculator' on your down left after viewing report of TCO analysis.

Alternatively, you can access pricing calculator by:

• Go to https://azure.microsoft.com/pricing/calculator/

2. Select your services

• Choose the Azure services you plan to use (e.g. Storage).

3. Configure Service Settings:

Specify detailed configurations for each service (e.g.. storage)

4. Estimate Usage:

Input your expected usage (e.g., storage capacity).

5. Review Pricing:

The calculator will provide a detailed breakdown of estimated costs.

6. Save and Share

• Cost estimates can be saved or exported in various formats for convenient sharing with team and future reference.

• Experiment with Scenarios:

Adjust configurations and usage to find the most cost-effective options.

By combining the Azure Pricing Calculator with a comprehensive TCO analysis, you can make informed decisions about your cloud strategy and optimize costs effectively. Remember, cost management is an ongoing process that requires attention and adaptation.