CAPEX vs OPEX: The Transformation of IT Expenditures

That aging server's been slowing down. And out of the twenty-three PC's you have in the office nearly half of them are ancient and are starting to exhibit “end of life” characteristics. Time to see what's budgeted for the year for IT to see what your options are. Unfortunately, it looks like IT's been budgeted…

That aging server's been slowing down. And out of the twenty-three PC's you have in the office nearly half of them are ancient and are starting to exhibit “end of life” characteristics. Time to see what's budgeted for the year for IT to see what your options are. Unfortunately, it looks like IT's been budgeted for a new server but no new PC's. So what's the answer? Make the PC's the priority and replace the worst of the bunch and squeeze another six months out of the server? Is not there a better way?

Yes, in fact, there is. Today small business can make the move the Fortune 500 made a long time ago and that's take a long, hard look at the cloud. With the cloud your problem is no longer a problem. There's no choosing between two unattractive choices, otherwise known as a dilemma. You can forget the capital expenditure (CAPEX) for new hardware and opt for an operational expense (OPEX).

Let's say that you currently have a month to month agreement with an IT firm that runs you $ 2530, or $ 110 per device. Instead of continuing that and incurring the $ 15,000 needed to upgrade the server and several PC's you go to the cloud. With the cloud you sign up for three years, will not need the IT vendor anymore and have no upfront costs, just your monthly fee. And if that fee is $ 2970 per month you're going to be way ahead. Yes, you do have to pay first and last month's fee, but of course, you consider that last month banked, not lost.

So you've increased your OPEX by $ 440 per month but you've eliminated your network's CAPEX for good. No more buying servers, no more buying PC's and no more endless hardware hassles. Once you've eliminated the old fashioned hardware in your office fully 99.75% of your issues are gone from your office. Not that a small percentage beyond the 99.75% do not remain, but now they're handled remotely, out of sight and out of mind.

So now you've got a network with no moving parts in the office and one that requires a fraction, less than ten percent, of the electricity the old one consumed. And it's accessible from anywhere, anytime with any web enabled device. Plus it's always on, always running beautifully and here's the most amazing part: Always new. How's that? Because you've very wisely shifted the hardware risk to a vendor and away from you. They have to maintain the hardware and the moving parts, you just access it when needed.

So if having a fixed fee setup with no server failures, PC slowdowns and other issues appeals to you, the cloud might be something you'll want to investigate. Here's the main benefit to a cloud network beyond the savings. A cloud network essentially gets you out of the IT business for good. Now it's just plug and play, use your network and pay. It leaves you free to focus on your business without the interference of endless IT issues. Is not that refreshing?