CapEx and OpEx whats better for IT strategy ?


For a new IT strategy how the budget should be decided in CapEx and OpEx. Is OpEx the better way to control the cost such as SAAS, cloud etc.

Cloud Computing
IT Strategy
Hitesh Mathpal
26 days ago

5 answers


There was a time when CapEx was the bigger percentage but now with cloud and SAAS services, one should think more about OpeEx. For example things like emails, CRM, office tools etc are easily available on cloud now.

Maya Kharkwal MA, BEd
26 days ago
Too general - Dr. David E. 26 days ago

It depends on your industry as well. For example for highly regulated and compliance govern industries its different. You can not have all the things on cloud and hence OpeEx is not always a choice. Yes, but in may small medium industries that is not the case.

Also, OpeEx is always a low cost option, not true. Cloud costs are not cheap.

Charu Gulati
26 days ago
Exactly - just as it is in medicine and healthcare. THANKs - Dr. David E. 26 days ago
Thanks . - Charu 25 days ago
DITTO - Dr. David E. 25 days ago

My 2 cents - For all green field projects - better option is OPEX if there is more of application development as it can be aligned to DevSecOps and Agile ways. Also for brown field projects it is good to go with CAPEX model till the platforms/applications are sunset. The migration cost of brown field projects to move to OPEX model need to be calculated properly

Even in OPEX we need to use the cost optimization models of cloud deployment and have more of reusable components with microservices layer architecture

Anand V
26 days ago
OPEX rocks - Dr. David E. 26 days ago
Thanks Anand, - Hitesh 26 days ago
DITTO - Dr. David E. 26 days ago

With Capex you don't only need to develop the application functionality you need, but also infra, security etc. You need a truckload of additional expertise that is not business critical for you. Why?

Clearly Opex is the way to go unless you have reasons not to, e.g. compliance.

Bart Groenewoud
25 days ago

OpEx is not cheap always. That is one misconception. Cloud ( SaaS) model is not cheap at all. However, you need a good amount of cost analysis. For example - setting up your outlook server vs using outlook in Azure. Or, using a on prem CRM vs Salesforce.

Here one thing is also important that customization of cloud apps ( OpEx) is sometimes not included in upfront OpEx rate card.

Hitesh Mathpal
21 days ago

Have some input?