TCO is the number a buyer should compare instead of the unit price. An IoT sensor that costs little to buy may need a cellular subscription every month, a cloud platform fee per device, a technician to install it, batteries replaced every few years, and someone to handle firmware updates and failed units. Over a multi-year deployment those recurring items often outweigh the hardware.
The concept matters because it changes design decisions. A longer battery life is worth a higher unit cost if it removes a site visit; a device management platform is worth its fee if it keeps the fleet updated without truck rolls. TCO also exposes the cost of vendor lock-in, such as a proprietary network that cannot be switched. It pairs with ROI to form the basis of a business case.
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