The acronym 'TCO' stands for Total Cost of Ownership in IT budgeting. TCO represents the comprehensive financial estimate considering all costs associated with acquiring, operating, and maintaining an IT asset over its lifetime. This includes initial purchase costs, operational expenses, overhead, and any potential end-of-life disposal costs. Understanding TCO is crucial for organizations to make informed budgeting decisions and to evaluate the long-term value of technology investments. By analyzing TCO, businesses can identify cost-saving opportunities and strategically allocate resources for better financial outcomes.