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CapEx and OpEx whats better for IT strategy ?

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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
Accounting
IT Strategy
technology
Hitesh Mathpal
3 months ago

5 answers

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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
3 months ago
Too general - Dr. David E. 3 months ago
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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
3 months ago
Exactly - just as it is in medicine and healthcare. THANKs - Dr. David E. 3 months ago
Thanks . - Charu 3 months ago
DITTO - Dr. David E. 3 months ago
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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
3 months ago
OPEX rocks - Dr. David E. 3 months ago
Thanks Anand, - Hitesh 3 months ago
DITTO - Dr. David E. 3 months ago
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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
3 months ago
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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
3 months ago

Have some input?