The transition from CAPEX to OPEX

OPEX or CAPEX?

Companies split their annual budget between operating expenses (OPEX) and capital expenditure (CAPEX).

The first comprise the day-to-day operating costs of the company, like salaries, taxes, the purchase of consumables and raw materials. These are deducted directly from a company’s sales revenue. The second are capital investments that allow a company to replace or improve existing assets.

With regards to software tools, OPEX includes, for example, the costs of a software licence or charges for internet access. CAPEX includes expenditure related to the acquisition of new computers, software or a server.

Leasing or investing in software solutions

In the era of Cloud Computing and SaaS (Software as a Service) solutions, companies need to ask themselves how appropriate it is to use CAPEX for their IT equipment.  Does this still make sense? Is it not more cost-effective to purchase equipment using regular operating expenses?

Choosing to subscribe to hosted software tools rather than investing in the purchase of hardware is a secure alternative to reduce the immobility of a company’s capital.

This allows costs to be reduced, liquid assets to be better distributed, and makes it possible to pay for specific needs. A company can, for example, decide to occasionally lease large storage capacity on the Cloud and cancel their subscription upon the completion of a project.

This flexibility that enables adjustments to be made following changes in a company’s objectives or when its needs evolve, has been shown to result in cost savings.

Online services, Software as a Service, Device as a service; these examples of OPEX allow companies to benefit from premium software solutions that are agile and scalable at least possible cost.

CoverApps supports companies in their choice of effective hosted IT solutions. In doing so, our teams ensure a successful transition from CAPEX to OPEX.

In addition to native cloud solutions, CoverApps stands out from the competition through its ability to provide OPEX alternatives for evolutions in CAPEX solutions. To do so, CoverApps purchases a client’s CAPEX solution, carries out the necessary upgrades or updates, and then provides this solution to the client as an OPEX alternative.

The proposed solutions can be installed internally, on premises, or be hosted for greater flexibility. This model, for example, was implemented for one of our clients who wanted to guarantee the DR plan of its new cloud-based solution through the hosting of its former platform and the supplying of associated telecommunications links.

CoverApps Etude de cas case study

Cloud-based Capex to Opex transition solution

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