Use OPEX to your organization’s advantage – take the example of an on-premise server.
Modern on-premise business servers start as low as several hundreds of dollars, but they can run into the thousands. Like any technology, the more features and capabilities the server has, the more expensive it will be.
Along with the purchase of the physical server, you’ll need to keep several other things in mind. What if the server breaks? What if you don’t know how to configure it properly? Where are you going to put it in your office?
All of those costs are attributed to CAPEX. To accurately calculate the cost of the server, you’ll also need to factor in maintenance costs, setup fees, floor space, and even depreciation.
However, OPEX can give you freedom. You can use cloud-hosted servers in a secure offsite location to store your data. Maintenance is handled for you, there are no setup fees, and you can add or remove user seats as needed.
All of that for a flat, predictable fee that fits into your unique budget.
The first step in switching to an OPEX-oriented IT infrastructure is to choose what you’d like to convert. Luckily, there are plenty of options to choose from.
CAPEX relies on you to spend a larger lump-sum payment on resources. OPEX takes far less commitment, meaning you’ll have more money available to spend in other areas of your company.
That means more company events, better office supplies, bigger bonuses – you name it.
When you use OPEX-based services, you’ll be using cloud-based solutions. Your entire company will have the opportunity to work remotely and more collaboratively, opening up a new realm of possibility.
Mobile employees are happier and more productive. And you’ll also gain access to a bigger talent pool from anywhere in the world.
One of the biggest weaknesses of CAPEX-based services is the outright purchase. With OPEX, you’ll always have access to the latest and greatest technology when you need it.
Using more modern technology makes your organization more competitive by giving you the best tools available. You’ll also be able to upgrade your technology far more often, keeping you on the competitive edge for longer.
“ With the world shifting from CAPEX to OPEX models, you are no longer buying a technology box or software package that will depreciate over time. The new model is more of a long-lasting partnership, so make sure that the future roadmap for OPEX-based software (SaaS) matches what you need as an enterprise. ”
Operational IT expenses function like most modern services – in a simple, easy-to-use predictable model. You’ll never be surprised by variable pricing, and you can usually set the recurring amount to meet your allocated budget.
On the other hand, capital expenses require an outright purchase. In doing so, you’re dedicating a large sum of money to something that may ultimately become obsolete within a short period of time.
In other words, you’re stuck with your purchase.
At the end of the road, OPEX will always be more flexible than CAPEX.
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