CapEx vs OpEx for IT & Cloud
By Bhaskara Reddy Sannapureddy
What’s The Difference Between CapEx & OpEx
Capital expenditures are the funds that a business uses to purchase major physical
goods or services to expand the company's abilities to generate profits. These
purchases can include hardware (such as printers or computers), vehicles to transport
goods, or the purchase or construction of a new building. The type of industry a
company is involved in largely determines the nature of its capital expenditures. The
asset purchased may be a new asset or something that improves the productive life of
a previously purchased asset.
An operating expense results from the ongoing costs a company pays to run its basic
business. In contrast to capital expenditures, operating expenses are fully tax-
deductible in the year they are made. As operational expenses make up the bulk of a
company's regular costs, management examines ways to lower operating expenses
without causing a critical drop in quality or production output.
Capital expenditures are major purchases, and because their costs can only be recovered
over time through depreciation, companies ordinarily budget for these purchases
separately from preparing an operational budget.
CapEx Vs OpEx
CapEX (Capital Expenditure) is the start-up cost to be sustained for
putting the asset/product into action. It is made of two main components,
development cost and investment cost.
OpEX (Operational Expenditure) is the operating cost during the working
life of the asset/product, including decommissioning.
CapEx, OpEx Story Video
What Activities to be Automated
Everyone should think about this – “80% of the support activities can be automated with
the minimal CAPEX and rest 20% can be manually managed with the reduced OPEX”.
Storage-as-a-Service (OpEx) vs. Traditional
Storage as a Service is a business model in which a large company rents space in their
storage infrastructure to a smaller company or individual.
Storage as a Service is generally seen as a good alternative for a small or mid-sized
business that lacks the capital budget and/or technical personnel to implement and maintain
their own storage infrastructure. SaaS is also being promoted as a way for all businesses to
mitigate risks in disaster recovery, provide long-term retention for records and enhance both
business continuity and availability.
Advantages of Storage-as-a-Service
Cost- factually speaking, backing up data isn’t always cheap, especially when take the cost of equipment into account.
Additionally, there is the cost of the time it takes to manually complete routine backups. Storage as a service reduces much
of the cost associated with traditional backup methods, providing ample storage space in the cloud for a low monthly fee.
Invisibility- Storage as a service is invisible, as no physical presence of it is seen in its deployment and so it doesn’t take up
valuable office space.
Security- In this service type, data is encrypted both during transmission and while at rest, ensuring no unauthorized user
access to files.
Automation- Storage as a service makes the tedious process of backing up easy to accomplish through automation. Users
can simply select what and when they want to backup, and the service does all the rest.
Accessibility- By going for storage as a service, users can access data from smart phones, netbooks to desktops and so on.
Syncing- Syncing ensures your files are automatically updated across all of your devices. This way, the latest version of a file
a user saved on their desktop is available on your smart phone.
Sharing- Online storage services allow the users to easily share data with just a few clicks
Collaboration- Cloud storage services are also ideal for collaboration purposes. They allow multiple people to edit and
collaborate on a single file or document. Thus, with this feature users need not worry about tracking the latest version or who
has made what changes.
Data Protection- By storing data on cloud storage services, data is well protected by all kind of catastrophes such as floods,
earthquakes and human errors.
Disaster Recovery- as said earlier, data stored in cloud is not only protected from catastrophes by having the same copy at
several places, but can also favor disaster recovery to ensure business continuity.
Cloud Customer – Connected with IaaS, PaaS,
Network Storage vs Hosted Storage vs Cloud
Robotic Process Automation(RPA) to Reduce OpEx
RPA is the automation of back and
front office processes that are
largely rules based, structured and
repetitive. The automation
replaces or augments humans
normally performing the task with
"robotic" equivalents. These are
software robots and not physical