This is how to determine the Total Cost of Ownership of a Video AI Analytics platform

For many organisations, it is important to calculate a Total Cost of Ownership when purchasing certain items such as hardware or other assets. Now, this is often only done for physical items, such as laptops, cars or buildings. But with non-tangible items like software, this is just as important. So too when you get started with Video AI Analytics to get more out of your video footage. But how do you calculate such a thing? A Total Cost of Ownership (TCO) for a Video AI Analytics solution? We explain in this article.

Before drawing up a TCO, you have probably already spent quite some time looking at all the options and possibilities available in this area. Perhaps you have also received several quotes and are curious to know which is the right choice for your organisation. Do not focus on the costs. There are more things that play a role in making the right choice. Would you like more help in that area? In this blog, you will find a checklist for choosing the right Video AI Analytics Software. Anyway, now back to where we started. The Total Cost of Ownership.

What is de Total Cost of Ownership?

When we talk about the Total Cost of Ownership, we are actually talking about all costs associated with the purchase and use of product or service throughout its life cycle. Apart from the purchase price, you include all costs: from the moment of purchase, until the moment you get rid of it. In this way, you systematically capture all costs of doing business with a particular supplier. In this case, the supplier of a Video AI Analytics platform.

What does total cost of ownership consist of?

Based on a survey of Gartner, costs can be divided into three categories: acquisition costs, operational costs and inefficiency costs. We explain these costs in more detail below.

Acquisition costs

By acquisition costs, we mean the costs incurred to purchase the software. These costs can be charged all at once or on a monthly basis (subscription form). Then there are the costs you incur for purchasing the necessary hardware. Think, for example, of the server park and a camera network if these are not yet (fully) in place. In practice, a separate TCO is also drawn up for these costs.

Operating costs

You also incur costs for using the software and necessary hardware, if any. You call these costs operational costs. Operational costs can be divided into several areas. These include costs for training employees/users, costs for maintenance of the software or hardware and the costs associated with the hours that employees or a system integrator/installer spend implementing the system.

Inefficient costs

Finally, there are inefficiency costs. Indeed, inefficiency costs are the costs that can be saved from the total amount if the software and equipment are used optimally. These costs can amount to as much as 30% of the total user cost. Often, these costs relate to hardware.

Weighing costs against benefits

When the TCO is finally calculated, the most important thing comes: weighing up the costs against the benefits of the purchase. In other words: do you think the purchase is worth it. And that is obviously something every organisation has to weigh up for itself. Of course, we are happy to help you in that consideration, by providing an overview of what some of the benefits of purchasing or using Video AI Analytics entail. Below is a summary:

• In-depth analysis of (existing) video material
• Automatic object recognition and motion/perimeter detection
• Automatic alerting in case of unwanted situations
• 24/7 monitoring of (surveillance) camera images
• Ease of installation
• A high Return on Investment

Want to know more about the benefits above? Discover it in this article we wrote.

What Total Cost of Ownership does not take into account

Besides the above benefits, there are another things that do not directly affect the TCO, but are important to include in your consideration. Because what the TCO does not look at is the savings that purchasing a new Video AI Analytics will bring. This system will probably replace one or more other systems, which can save costs as they no longer need to be used. In addition, the higher accuracy, ensures that the number of false alarms within a control room will decrease drastically. This will lead to lower costs, as staff can be used more efficiently. After all, they no longer have to pay attention to reports that do not matter. The efficient use of staff is very important these days, as labour shortages mean that staff are not on the menu. Furthermore, working with the latest technology will increase job satisfaction and attract young, ambitious employees. Because let’s face it, who doesn’t want to work with state-of-the-art technology?

Looking for a Video AI Analytics platform yourself?

Are you looking for a solution in the field of Video AI Analytics? We would love to help you discover the possibilities for your organisation. Where many still see Artificial Intelligence (AI) as future potential, we try to inspire people by applying the power of this technology in an approachable way in current practice. This makes AI available and accessible to a wide audience. Want to know more about our offerings? Visit our product page or Contact one of our specialists. They will be happy to talk to you.