Tuesday, September 23, 2014
Cloud Appeal: Why OpEx Economics Has Begun Replacing CapEx in the IT Industry
Simply put, OpEx (operating expenditure) investments generally require ongoing operating costs that have the benefit of a reduction in initial investments. Conversely, CapEx (capital expenditure) solutions have larger up-front costs for hardware that depreciate over time. So, as cloud services providers have honed their deployment, service, and support models, businesses are finding that, over time, the OpEx IT solutions available in the cloud are preferable, not only because they require less startup investments, but also because they reduce the overall maintenance (and replacement) costs associated with traditional CapEx IT solutions.
Traditionally, CapEx investments resulted in on-premise data centers that took up space, consumed electricity, needed cooling, and required a staff dedicated to their maintenance. OpEx solutions greatly eliminate those costs in that, while an off-site data center provides the client with constant connectivity, storage, and redundancy, the service provider takes on the maintenance and the “power-cool-connect” costs of running the data center. So businesses can simply include the predictable costs of these cloud services in their overall operating budget, rather than paying for a support staff and gathering funds every three to five years to purchase expensive hardware in need of upgrades. This kind of “pay-as-you-consume” model is particularly attractive to owners and managers of small-to-midsize companies, who often lack the resources to employ their own IT staff.
“Historically, businesses chose the on-premise CapEx model because they could see that their data would be both private and secure, but in the past few years, people have begun to move their mission-critical data to the cloud because of security, not in spite of it,” says David Powell, TekLinks’ VP of Managed & Cloud Services. “Cloud services providers now provide their clients with environments that are fully redundant, encrypted, and protected against the threat of malicious attacks or downtime. So business owners are trusting the cloud more and more to help them achieve their performance goals in a cost-effective way.”
Moreover, OpEx solutions in the cloud add flexibility to the work environment so that employees can communicate in more innovative and effective ways, while freeing up funds that can be used toward other investments and big projects related to their line-of-business requirements.
" What cloud services providers like TekLinks are doing is simply operationalizing your CapEx, and we’re doing it much better than most business owners could do on their own.”
“When you think about moving any of your IT needs to the cloud – whether it’s voice-over-IP, email, backups, the list goes on – what many should keep in mind is the cost of managing your IT resources. What cloud services providers like TekLinks are doing is simply operationalizing your CapEx, and we’re doing it much better than most business owners could do on their own,” says Donny McCarty, TekLinks’ Director of Telecom Services. “The cloud provides businesses with a predictable monthly (or yearly) budget, greater flexibility and scalability, and evergreen technology that you don’t need to worry about keeping updated. That’s really appealing when you don’t have the time or capital to spend on IT in addition to running your business.”
To learn how moving to the cloud can benefit your company, call us at 205.314.6600, email our sales team at email@example.com