What is a TCO and How It Helps Clients with Digital Transformation Decisions?
When organizations set out to redesign their digital experience or evaluate new platforms, the conversation often centers on flashy features, sleek interfaces, and promises of improved customer engagement. But beneath those surface-level benefits lies the more critical question: What will it really cost today, tomorrow, and years from now?
Digital transformation decisions are rarely just about the initial investment. licensing, hosting, personalization tools, ecommerce add-ons, DAM/CMP integrations, and even AI capabilities all carry ongoing expenses that can dramatically shape the long-term success—or strain—of a platform. Without a clear, data-backed view of these costs, marketing and technology leaders risk underestimating budgets, overlooking hidden expenses, and making choices that may not scale with their growth.
That’s where Total Cost of Ownership (TCO) comes in.
What is a TCO?
Total Cost of Ownership (TCO) provides a comprehensive outline of all the digital costs for a site redesign and allows digital agencies and their clients to compare costs for 2+ platform options across multiple years. This includes Digital Experience Platform (DXP) licensing costs, ecommerce tooling, DAM/CMP, personalization, AI tools, hosting, etc.
- It is the purchase price of an asset combined with the ongoing costs of operation.
- It can be used for a single implementation or a comparison between 2 platforms (site redesign isn't mandatory).
- A TCO typically accompanies a DXP evaluation and recommendation (costs and cost comparisons are important parts of the final decision).
- Note: an agency’s strategy/creative/implementation costs are not included (these are provided separately).
How It Benefits Digital Marketers
TCOs help digital marketers determine the direct and indirect costs with purchasing an upgraded or new DXP. It not only highlights potential savings opportunities but also empowers clients to make confident, data-driven decisions about which DXP best supports their digital transformation goals.
When guiding clients, we want to understand:
- Are you exploring a potential platform change, or seeking ways to get more value from your current stack?
- Would a TCO help you build a stronger case and plan more effectively for your upcoming budget cycle?
How Velir Can Help
Velir helps organizations by leading TCO discussions through a structured, collaborative process. It starts with a discovery call to align on business goals, review the current architecture, and uncover all relevant costs—from licensing and hosting to support, hidden internal expenses, and legacy technical debt—while also factoring in growth plans and pain points with the existing DXP. We then share these insights with DXP partners, who can join the client conversations if desired, to ensure nothing is overlooked and all options are aligned with the client’s needs. From there, Velir gathers detailed cost information to create an apples-to-apples comparison across platforms, building a comprehensive TCO spreadsheet that models licensing, hosting, and other expenses over a 3–5 year period. Finally, we present the TCO to clients, walk through the findings, and refine it based on their feedback to provide a clear, actionable view of their investment.
See more details on Velir’s TCO Assessment landing page.