Often, organizations tend to overlook the total cost of ownership (TCO) and take decisions based on the upfront cost to acquire software and services, known as capital expenditure (CapEx). While the upfront cost determination is essential, in the long run, the TCO matters the most. The TCO includes both CapEx and operational expenditure (OpEx), covering all the dimensions of the application life cycle. The CapEx cost includes the price organizations pay upfront to acquire services and software, while OpEx includes the cost of operation, maintenance, training, and retirement of software applications. You should consider all associated costs to help to make more strategic decisions while calculating your ROI in the long run.

For example, when you buy a refrigerator, which is going to run 24/7, you look for an energy-saving rating to keep your electricity bill low. You are ready to pay a higher price upfront as you know the total cost over time will...