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Cloud Native Architectures by Piyum Zonooz, Erik Farr, Kamal Arora, Tom Laszewski

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CapEx versus OpEx

When building the business case for cloud, one of the most compelling arguments to senior leadership (read: C-suite) is the ability to shift IT spending from Capital Expenditures (CapEx) to Operational Expenditures (OpEx). A capital expense is defined as money spent by a business on acquiring or maintaining fixed assets, such as land, buildings, and equipment. An operating expense is defined as the ongoing cost for running a business/system or providing a service/product.

There are several advantages that make up a compelling business case for leaders to transition to an OpEx model, which are enumerated as follows:

  • Lower, recurring costs versus large, upfront investments: As mentioned earlier in this chapter, building out ...

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