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Asked: May 11, 20262026-05-11T10:55:47+00:00 2026-05-11T10:55:47+00:00

When selling a software package that requires hardware, typically dedicated hardware (could be a

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When selling a software package that requires hardware, typically dedicated hardware (could be a VM), the buyer typically has to buy the server it will run on. So the total cost of ownership (focusing on the capital expense) includes the hardware in addition to the software.

For example, a $3000 bug tracking package might need a $1500 server to run on, total cost is $4500. The hardware is 50% of the software cost, or 1/3 of the total cost.

Of course, with open source packages, the ratio is inverted.

So the question is: does it matter? At what point does hardware expense affect the sale of the software?

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  1. 2026-05-11T10:55:47+00:00Added an answer on May 11, 2026 at 10:55 am

    ‘typically’ – that’s an assumption.

    And the cost can be more than just hardware and software if there are service or renewal fees involved. This can be true of open source as well, because a lot of companies like to pay for indemnification and services.

    If you buy hardware plus operating system, the decision to go with Windows or Linux comes into play.

    I doubt very much that there’s a meaningful, fixed ratio. It’s an interesting question, though. You’d need a LOT of data, and I don’t see that it’s been gathered into one place.

    I had another thought in a comment below that’s worth surfacing. There’s another consideration that’s becoming more important all the time: power consumption. Some corporate data centers can’t add a new server without retiring an old one or by reducing power consumption some other way. Being able to deploy a new software purchase on an existing server is big plus. If it can be virtualized, even better.

    So it’s not always hardware and software. Other economic considerations, like power cost, have to figure in.

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