Based on CoSN case study work, software purchases and licensing is less than 5 percent of the total cost of ownership (about 10 percent of direct or budgeted costs). This can still be a significant cost, and technology leaders should review contracts and installations for licensing compliance and to assure that they aren't paying for unused copies.
Open Source Software
We are all witness to the controversy over the relative cost of ownership of open source software (OSS) versus that of proprietary software offerings. While articles and case studies from some of the proprietary software vendors may be considered a defensive move, they do bring up points that address the total cost of ownership, helping users to consider issues beyond the initial and annual licensing costs. "The Real Cost of Open Source Software" provides TCO considerations. For more information on open source software, visit CoSN's Open Technologies Leadership Initiative.
A 2011 study done by LSE Research for the UK
government Cabinet Office on the implementation and use of open source
software operating systems and applications versus their proprietary
counterparts: Total Cost of Ownership of Open Source Software: a Report for the UK Cabinet Office Supported by OpenForum Europe. Data was collected via survey from OSS users. This study generally indicates long-term savings when migrating to open source software.