TCO (total cost of ownership) is defined as the total of all expenditures and expenses of a particular product or service. The concept of total cost of ownership includes licensing fees, hosting expenses, DNS fees, and extra plugins or extensions fees. As a result, you must assess your requirements first. And then, determine what types of services you are willing to pay for, and how they will benefit your product.
The Concept of TCO covers many aspects of a purchase: it provides a cost basis for assessing the overall value of an investment, the potential return on the investment, the internal rate of return, any additional economic value, as well as the costs associated with replacements or upgrades. In other words, a TCO is a measure of an organization’s overall expenses for assets.
Why Magento?
Reducing TCO in business is extremely advantageous. An overall analysis prior to the launch of any product will help tremendously. One of the biggest things is avoiding unpleasant surprises throughout the development phase and staying within your budgetary constraints. Magento’s ecommerce cloud meets all your immediate needs and is optimal for scaling your business in the long run, which means you don't have to consider implementing other services that then result in an increase in opportunity cost, a measure of the loss you incur as a result of switching from one platform to another.
This is why implementing Magento commerce can lower your operating costs greatly and customize your business.
How does Magento Commerce Reduce Your TCO?
1. Relatively Simple Update Process
Magento releases regular updates. Regular updates actually decrease operating costs resulting in a lower long-term cost and, eventually, a lower TCO. This is because, Your plugins and other components will function properly according to the latest version, provided that you update your website on a regular basis. If you decide not to regularly update Magento, you will need to devote additional time and resources to make adjustments and make your components work effectively. On top of that, updating parts separately will add to the overall effort and cost, and will not give you the benefits that come with a lower TCO.
2. It Increases Security to Allow For Better TCO Control
The most critical component in retaining a customer’s trust is security. As a result, Magento devotes a large amount of work to improving the platform’s security. With each new update, they continue to release security patches, allowing users to improve the security of their system. Consequently, the regular update offers peace of mind in terms of security to both merchants and customers.
3. It Applies The Feature-First Strategy to Lower Your TCO
Magento’s ecommerce platform provides you with a lead over your competition. It is because you can make capital out of a plethora of features not accessible to your competitors. You’ll have plenty of time to learn how to use the features and tailor them to your project’s needs in order to provide a better user experience.
4. High-Stakes situations Necessitate High-Level Performance to Lower TCO
COVID-19-driven changes in shopping patterns resulted in a 44.4 percent increase in eCommerce sales in the last few years. Continued growth is anticipated in digital commerce throughout this year as well as the next few. To take advantage of the latest features and performance enhancements, merchants should ensure their sites are running the most recent version of Magento Commerce. There is more money up for grabs in eCommerce than ever before. Those who provide the most attractive, seamless digital experiences will gain a significant portion of that business and market share. In addition, those that use Magento's eCommerce platform will have a more favored position in this race.
Every Magento Commerce update has Platform Performance Upgrades, which can have a significant and cumulative impact. The conversion rate is reduced by 7% for every second of delay, and page speed is a major SEO ranking element. Therefore, Organizations should make use of the hasty and seamless experience provided by Magento’s platform
Evaluating and decreasing TCO is becoming increasingly more important as businesses mature and look to increase profits by reducing costs. By including maintenance and upgrade costs, eliminating vendor management and labor costs, providing patches to reduce costly emergencies and security breaches as well as delivering a cost effective support plan for all your e-commerce needs, Magento Commerce is an extremely viable option when it comes to lowering your TCO and choosing the right integrations and extensions for you.
Interested? RT Dynamic is a full-service Magento development firm and our experts can make sure your e-commerce platform serves your business in every way possible.Get in touch today for a FREE Business Analysis session!
