{"id":21107,"date":"2025-11-17T11:57:36","date_gmt":"2025-11-17T11:57:36","guid":{"rendered":"https:\/\/www.walkme.com\/blog\/?p=21107"},"modified":"2025-11-17T11:57:36","modified_gmt":"2025-11-17T11:57:36","slug":"total-cost-of-ownership-for-software","status":"publish","type":"post","link":"https:\/\/www.walkme.com\/blog\/total-cost-of-ownership-for-software\/","title":{"rendered":"CTO Guide: How to Calculate and Reduce Software TCO"},"content":{"rendered":"\n

Software is now one of the biggest line items on any balance sheet. As digital transformation<\/a> accelerates, CTOs are under pressure to prove every dollar spent drives real business value.<\/p>\n\n\n\n

The numbers back it up. According to the OECD, global GDP is expected to grow 3.2% in 2025, reflecting steady investment despite economic headwinds<\/a>. That momentum comes with scrutiny, especially on technology ROI.<\/p>\n\n\n\n

The challenge? Most cost analyses stop at the invoice. Maintenance, training, upgrades, and user support are often buried in other budgets, masking the true cost of running software at scale.<\/p>\n\n\n\n

That\u2019s where total cost of ownership (TCO) comes in. TCO reveals the full financial impact of software across its lifecycle, giving CTOs the visibility they need to prove ROI, cut waste, and guide smarter technology bets. <\/p>\n\n\n\n

This guide shows how to uncover every cost layer and turn software spend into strategic value.<\/p>\n\n\n\n

What should CTOs know about total cost of ownership (TCO)? <\/h2>\n\n\n\n

For CTOs, every technology choice has two sides: innovation and cost control. Balancing both is the job.<\/p>\n\n\n\n

Total cost of ownership (TCO) provides a clear view of what software really costs over time \u2013 setup, maintenance, training, upgrades, and the energy required to keep everything running. That visibility prevents budget surprises and reveals costs that don\u2019t appear on purchase orders.<\/p>\n\n\n\n

TCO tracks both direct and indirect spend across the software development lifecycle<\/a>. It helps CTOs weigh short-term innovation against long-term financial discipline, and prove ROI with data, not estimates.<\/p>\n\n\n\n

Sustainable technology<\/a> adds another layer. Regulations like the EPAct<\/a> make energy efficiency part of TCO and a growing factor in technology ROI.<\/p>\n\n\n\n

The bottom line<\/strong>: TCO isn\u2019t just a cost metric; it\u2019s a leadership tool that keeps growth and governance moving in the same direction.<\/p>\n\n\n\n

Why is TCO important for CTOs? <\/h2>\n\n\n\n

Experienced CTOs know that software costs can quickly escalate, turning what seemed like a straightforward investment into a cost trap. <\/p>\n\n\n\n

TCO is one of the most important financial estimates a CTO can track. It captures every layer, including license fees, deployment, training, support, upgrades, and disposal.<\/p>\n\n\n\n

Deloitte says 72% of organizations cite improving margins through cost reduction as their top technology priority in 2025<\/a>. This shows CTOs are taking notice and using methods like TCO to optimize technology investments.\u00a0<\/p>\n\n\n\n

\"Deloitte<\/figure>\n\n\n\n

A holistic view is essential. CTOs must see technology as a financial layer, not just an operational tool. Remember that measuring all costs upfront provides businesses with the data needed for ROI calculations. <\/p>\n\n\n\n

In plain terms, keeping TCO front and centre means you:<\/p>\n\n\n\n