No two TCO cost models ever show exactly the same cost model structure or calculations, so you’re not getting a true picture with industry claims on what’s most affordable. James & Paul dive into the weeds to explain how platform cost models are nuanced and what you should take into consideration.
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Hot on the heels of Shopify’s smart PR on their platform TCO cost model and value proposition ‘research’, we’re pulling apart why vendor-led cost model analysis needs to be taken with a generous pinch of salt.
The issue: different methodologies for calculating the cost of ownership distorts perceptions of value and can create false flags, either under or overstating real costs.
There are lots of “research shows platform X has the lowest TCO / fastest ROI” studies, and from our experience this is smoke & mirrors. Which platform ecosystem delivers the most affordable cost model and highest value is dependent upon the size of business, complexity of build, operational setup and a brand’s red lines. It also depends upon how value is defined, and whether or not attempts are made to put a monetary value to considerations like opportunity cost and operational efficiency.
When a cost model assessment is based on the business type that is best suited to a particular platform, inevitably the research will demonstrate it hits the value goal.
In this podcast, we break down why you need to be sceptical when vendors publish cost models showing they deliver the most value / quickest ROI. It’s great marketing but we explain why no platform can ever state it consistently delivers the lowest cost for any business. Let’s pick apart cost models!
Want to suggest a topic or guest for a future episode? Contact us via the website or on LinkedIn.
