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Traditionally, large IT organizations have utilized their resources to design, build and launch new applications within their datacenters using Commercial Off-The-Shelf (COTS) software. The objective of this paper is to present the reader with general guidelines for developing a TCO comparison for two types of enterprise implementation: a customized software solution and a SaaS solution. Comparing the Total Cost of Ownership (TCO) for each approach will enable the decision maker to choose the best approach. Under the build-it paradigm, it is assumed that the cost to develop a new application is equal to the cost of the software package purchased. After all, the IT personnel who would customize the software solution were already considered an allocated expense item in the IT budget.
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