The total cost of ownership (TCO) is a financial estimate that helps individuals and organizations understand the complete costs associated with purchasing and using a product or service over its entire lifecycle. This includes not only the initial purchase price but also ongoing expenses such as maintenance, training, and operational costs. By considering TCO, buyers can make more informed decisions, as it provides a clearer picture of the long-term financial impact. For example, when evaluating different software solutions, understanding TCO can reveal which option is more cost-effective over time, rather than just focusing on the upfront costs.