Where did TCO originate?
The total cost of ownership calculation came into use in 1929 in the railroad industry. It provided the cost basis upon which other financial calculations could be made. In 1987, the Gartner Group applied this financial calculation to the information technology industry. Analysts posited that software and hardware were assets, and as such there were acquisition costs and maintenance costs incurred with both. The true cost basis of information technology could only be determined by looking at both classes of costs combined. Hence, TCO made the leap from physical assets to IT.