23-02 CAPEX vs OPEX
| Capital Expenditure (CAPEX) | Operational Expenditure (OPEX) |
|---|---|
| Spending money upfront on physical infrastructure deducting that expense from your tax bill over time. | The costs associated with an on-premises data center that has shifted the cost to the service provider. The customer only has to be concerned with non-physical costs. |
| • Server Costs (computers) • Storage Costs (hard drives) • Network Costs (Routers, Cables, Switches) • Backup and Archive Costs • Disaster Recovery Costs • Datacenter Costs (Rent, Cooling, Physical Security) • Technical Personal | • Leasing Software and Customizing features • Training Employees in Cloud Services • Paying for Cloud Support • Billing based on cloud metrics eg. ◦ compute usage ◦ storage usage |
| With Capital Expenses, you have to guess upfront what you plan to spend | With Operational Expenses you can try a product or service without investing in equipment |