Total Cost of Ownership

Simplified Calculator Tool to Incorporate Environmental Considerations into Decisionmaking Reviewed 08/07/2007 Total Cost of Ownership (TCO) modeling is a tool that systematically accounts for all costs related to an information technology (IT) management decision. TCO includes all costs, direct and indirect, incurred throughout the life cycle of an asset, including acquisition and procurement, operation and maintenance and end-of-life management. This TCO Calculator Tool allows users to compare the costs of different options for the life cycle management of IT equipment with an emphasis on decisions that may have an environmental impact. For example, what is the annualized cost of purchasing ENERGY STAR qualified equipment compared to a conventional unit? What will be the cost savings of extending the period of use for equipment from 4 years to 5 years, or purchasing only desktop processing units and keeping the current desktop monitors?

The Calculator Tool allows the user to enter up to 4 different products or scenarios for purchasing, operations and maintenance, and end of life management of computer equipment. While the emphasis is on decisions with a potential environmental impact, this tool includes data entry fields for any costs that the user might consider in a TCO analysis. The user can also modify the tool to include additional cost categories of interest. For more information on TCO, see Answers to Frequent Questions: Total Cost of Ownership , available on the Federal Electronics Challenge website at: http://www.federalelectronicschallenge.net/resources/docs/costofown.pdf.

How to Use the TCO Calculator

Step 1 Choose up to four products or life cycle management scenarios to analyze. Enter descriptive information about each product or scenario in Row 13 (e.g., product name, product feature, alternative service life of equipment, or end of life management option such as donation or recycling.) Examples of scenarios are entered in these cells. Enter cost data in purple-shaded cells (Columns C-F). The Calculator is organized into four sections: general information, purchasing, operations & maintenance, and product disposition. Instructions for data entry, specific to each cost category are provided line-by line in Column G. Unless specified, all costs entered into the calculator should be on a per unit basis (i.e., total cost/# of units). Note 1: There are three mandatory data fields: electricity costs (Row 9), number of units (Row 10), and equipment purchase price (Row 16). Users can choose to enter data or omit any other data fields depending on the scope of the analysis and data availability. Note 2: Default values are provided in Column H, where available. For the best results, data specific to your organization should be used whenever possible. Step 3 View results. Scroll down to Rows 96 -98 for the results. Results are presented as total cost per unit over service life; total annualized cost per unit; and total cost for purchase of specified number of units. The Calculator Tool also provides subtotals for each life cycle phase (purchase, operation & maintenance, and end of life management) at the end of each section.

Step 2

Total Cost of Ownership Simplified Calculator Tool to Incorporate Environmental Considerations into Decisionmaking Instructions: This Total Cost of Ownership Calculator Tool allows you to compare the total cost of ownership of alternative products or product life cycle management scenarios. The Tool can calculate and compare up to 4 products or scenarios. For data entry, see line-by-line instructions in Column G. All entries should be per unit cost. Default values are provided where available (see Column H). A * indicates a mandatory data field.

Units General Information Electricity Rate* Number of Units* $/kWh units Product or Scenario 1
CPU+ LCD product or w/ES, 4yr life, & donation scenario $0.0867

Instructions
Input actual energy cost to override default value. Purchased, leased or provided by seat management contract. $0.0867

Default Values

References
U.S. Department of Energy, 2006.

Product or Scenario 2
CPU+ LCD, w/ ES, 4yr life; outsource recycle

Product or Product or Scenario 3 Scenario 4

CPU+LCD w/ES; 5 yr life; outsource recycle Optional: specify product or scenario analyzed CPU + CRT, in each column. no ES, 4 yr life, outsource recycle

Purchasing Initial Cost

For leases or seat management, can enter the $1469 desktop + 17-19" LCD monitor); $1244 desktop with CRT monitor; $1757 notebook. total per unit contract cost on line 16, then skip line 17 & 18. Operating system, utility applications, communications software. Electronics Environmental Benefits Calculator, Version 1.0., November 2006.

Hardware Acquisition*

$/unit

Software Acquisition

$/unit
Including installation, operation, maintenance and disposition, if purchased with hardware or software acquisition. Including evaluating options, developing bid specs, evaluating proposals, and negotiating contracts.

Service Contracts

$/unit

Administrative

$/unit

Set Up & Installation

$/unit

Other Subtotal Initial Cost Expected Service Life

$/unit $/unit

$0.00

$0.00

$0.00

$0.00

Expected Service Life Operations & Maintenance Training, Maintenance & Support

years

Service life within the organization that made the initial purchase, including internal redeployment of the asset.

Training

$/unit

Initial and on-going training for end user, including formal classes and informal assistance. Contract and staff support to maintain and support PC, including technical support, maintenance contracts and repair costs.

Maintenance & Support

$/unit

Unit Energy Consumption & Cost

For desktop processing units and monitors, users can choose to enter custom data on unit power consumption and usage patterns OR enter a unit energy consumption (UEC) default value. Use rows 43 and 55 to enter default values for desktop processing units and monitors, respectively. For notebooks, users can only enter unit energy consumption (UEC). Default values are provided for notebooks in row 58. Enter data in rows 34 - 39 to calculate unit W energy consumption for desktop processing W units. For monitors use rows 46 - 51. Make W sure the total hours (row 40) equals 24 hours. hrs/day If data is not available, leave all cells blank in the column and enter default value in row 43. hrs/day

Desktop Processing Units Power Consumption in "Active" Mode "Stand By" Mode "Off" Mode Number of Hours in "Active" Mode Each Day Number of Hours in "Stand By" Mode Each Day Number of Hours Turned "Off" Each Day Total Hours per Day Annual Unit Energy Consumption (calculated) OR

See manufacturer specifications. See manufacturer specifications. See manufacturer specifications. ENERGY STAR qualified units: 4 hrs "active" mode per day; 5.5 hrs "stand by" mode per day; ENERGY STAR calculator (1) 14.5 hrs "off" mode per day. Conventional units (not ENERGY STAR compliant): 9.5 hrs "active" mode per day; 0 hrs "stand by" mode per day; 14.5 hrs "off" mode per day.

hrs/day hrs/day kWh/yr

0 0

0 0

0 0

0 Make sure total is 24 hours. 0

Only enter default value if data is NOT entered in rows 34 - 39. Note: default values can be used for some product scenarios & data entered in rows 34 - 39 for other products scenarios. ENERGY STAR qualified unit: 352 kWh/yr; Conventional Unit (not ENERGY STAR qualified): ENERGY STAR calculator (1) 371 kWh/yr. Assumptions : Hours in use as defined above (rows 37-39). Unit is used 264 days per year; 76% of computers are turned on every day; 64% are left on 24 hours per day; and 7% have power management features enabled.

Default Annual Unit Energy Consumption Monitors Power Consumption in "Active" Mode "Deep Sleep" Mode "Off" Mode Number of Hours in "Active" Mode Each Day Number of Hours in "Sleep" Mode Each Day Number of Hours Turned Off Each Day Total Hours per Day Annual Unit Energy Consumption (calculated) OR

kWh/yr

ENERGY STAR calculator (2)

W W W hrs/day hrs/day hrs/day hrs/day kWh/yr

Enter data in rows 46 - 51 to calculate unit energy consumption for monitors. Make sure the total hours (row 52) equals 24 hours. If data is not available, leave all cells blank in the column and enter default value in row 55.

See manufacturer specifications. See manufacturer specifications. See manufacturer specifications. ENERGY STAR qualified units: 4 hrs "active" mode per day; 5.5 hrs "sleep" mode per day; 14.5 hrs "off" mode per day. Conventional units (not ENERGY STAR compliant): 9.5 hrs "active" mode per day; 0 hrs "sleep" mode per day; 14.5 hrs "off" mode per day. ENERGY STAR calculator (2)

0 0

0 0

0 0

0 Make sure total is 24 hours. 0

Only enter default value if data is NOT entered in rows 46 - 51. Note: default values can be used for some product scenarios & data entered in rows 46 -51 for other products scenarios. ENERGY STAR qualified units: 17" LCD, 85 kWh/yr; 17" CRT, 80 kWh/yr. Conventional units (not ENERGY STAR compliant): 17" LCD, 266 kWh/yr; 17" CRT, 429 kWh/yr. Assumptions: For LCD, ENERGY STAR values assume 81% of units have power management features enabled; 82% of units are left on 24 hours/day. For CRT, ENERGY STAR values assume 77% of units have power management features enabled, and 68% of units are left on 24 hours/day. For both LCDs and CRTs, the hours in use are the same as above (rows 49-51); values assume 76% of units are turned on 264 day/year.

Default Annual Unit Energy Consumption Notebooks

kWh/yr

Default Annual Unit Energy Consumption Total Annual Energy Consumption Total Annual Electricity Cost Total Electricity Cost over Expected Service Life Power Management (PM)

kWh/yr kWh/yr $/unit/yr $/unit 0 0.00 $0.00 0 0.00 $0.00 0 0.00 $0.00 0 0.00
For initial purchaser only.

ENERGY STAR qualified units: 57 kWh/yr. Conventional units (not ENERGY STAR compliant): 98 kWh/yr. Assumptions : For ENERGY STAR qualified unit, 64% of units are left on 24 hrs/day; 25% of units have power management features enabled.

LBNL, 2006.

$0.00

Purchase additional Software to Manage Unit Power Consumption Training to Support PM End User Support for PM Subtotal Power Management

Enter cost of software per unit in service. If your organization installed centralized PM software, account for these additional cost savings under unit energy consumption above.

$/unit $/unit $/unit $/unit

IT staff and end user time in training (labor rates X hours/unit). IT Staff (labor rate X hours/unit).

$0.00

$0.00

$0.00

$0.00

Equipment Upgrade for Internal Reuse Upgrade - Hardware & Software Upgrade - Staff Resources Subtotal Equipment Upgrade Other Operations & Maintenance
Use for any items not covered above.

$/unit $/unit $/unit

Including IT and property management staff, if applicable (labor rate(s) X hours/unit).

$0.00

$0.00

$0.00

$0.00

Other Operations & Maintenance Subtotal Operations & Maintenance

$/unit $/unit $0.00 $0.00 $0.00 $0.00

Product Disposition: Trade In, Sale, Transfer (to another Federal Agency), Donation, Recycling or Disposal
Including inventory management, transfer paperwork, payment processing, finding a charitable organization, or finding & contracting with a recycler. Labor rate(s) X hours/units. Labor rate X hours/unit. Inventory management and forms @ $25/unit ($50/hr X .5 hrs); preparing transfer documents @ Gartner, November 2005. $12.50 ($50/hr X.25 hrs). Other costs to include: finding a charitable organization that wants the equipment (20-40 hrs divided by # of units); selecting and contracting with a recycling service provider (5-20 hours divided by # of units); using a GSA Schedule provider (number of hours of staff time divided by # of units.) $8.75/unit ($35/hr X .25 hrs) $12.50/unit ($50/hr X .25 hrs) Gartner, November 2005. Gartner, November 2005. Gartner, November 2005.

Administrative overhead Removing equipment from desktop Backing up hard drive

$/unit $/unit

Labor rate X hours/unit.

$/unit
Including any hardware or software purchases $12.50/unit ($50/hr X .25 hrs) and labor (rate X hours/unit). This line item cost may be included in recycling or outsource contracts. Include hardware and software costs and labor (e.g. new software license and installation). Including cost of storage ( $/ft2/month X months in storage) plus labor costs of putting into storage and taking out of storage).

Media sanitization Refurbish or upgrade equipment

$/unit $/unit

$8.75 for reloading operating system ($35/hr X .25 hrs); $12.50 for testing PC ($50/hr X .25 hrs). Gartner, November 2005. $0 when recycling equipment.

Storage Packing Shipping/Transportation Support to Recipient

$/unit $/unit $/unit $/unit

Including labor (e.g., installation assistance, technical support) and recycling/disposition services. All equipment is eventually recycled or disposed of, by your organization or a subsequent user. Include costs to your organization as well as subsequent users. Including packing supplies and labor costs (rate X hours/unit). Labor cost @ $4.38/unit ($35/hr X .125 hrs) Gartner, November 2005. Gartner, November 2005.

$40/unit, including shipping

Gartner, November 2005.

Recycling/Disposal Fees

$/unit

Outsourcing (any of the above)

$/unit

Cost of contract. Administrative costs $48.25/unit, including media sanitization using three-pass DOD Standard 5220-22-M wipe, pertaining to contract should be included here inventory, reporting, auditing, and refurbishing, but not including shipping. or in administrative line item above. This line item may include equipment tradein, if not included in new equipment purchase price; equipment sale; or recycling revenue. Revenues vary depending on equipment age. For 3 year old PC, assume resale value of 5-7 percent of initial cost. For equipment 4+ years, assume zero resale value.

Gartner, November 2005.

Gartner, November 2005.

Revenues Other Subtotal Net Disposition Cost Total Cost per Unit Over Service Life Total Annualized Cost per Unit Total Cost for Purchase of:

$/unit $/unit $/unit $/unit $/unit/yr 0

$0.00 $0.00 #DIV/0! $0

$0.00 $0.00 #DIV/0! $0

$0.00 $0.00 #DIV/0! $0

$0.00 $0.00 #DIV/0! $0

References Electronics Environmental Benefits Calculator, Version 1.0, November, 2006.A19

ENERGY STAR, Life Cycle Cost Estimate Calculator for Desktop/Side Computers, Assumptions for Desktop Computers, 10/05 Update. Available at http://www.energystar.gov/ia/business/bulk_purchasing/bpsavings_calc/Calc_computers.xls ENERGY STAR, Life Cycle Cost Estimate Calculator for Computer Monitors, Assumptions for Computer Monitors, 10/05 Update. Available at http://www.energystar.gov/ia/business/bulk_purchasing/bpsavings_calc/Calc_monitors.xls Gartner, Inc. 2005. PC Disposal Cost Update 2005: Mitigating Risks. Research ID Number. G00134319.

Lawrence Berkeley Livermore Laboratory (LBNL) ENERGY STAR "ccap-office-060801" spreadsheet, November, 2006, as cited in the Electronics Environmental Benefits Calculator Version 1.0. U.S. Department of Energy, 2006. Energy Information Administration (EIA) Electric Power Annual Report. "Average Retail Price of Electricity to Ultimate Customers by End-Use Sector" (Commercial end-user in 2005). Found at: http://www.eia.doe.gov/cneaf/electricity/epa/epat7p4.html. Downloaded: October 10, 2006.