From CapEx to OpEx, and Greater Security

In the cloud, cloud service providers (CSPs) manage the infrastructure they control — where organizational data and applications are stored — and perform the patching and updates so that the applications they use remain current.

These advantages are not inconsiderable, and executives are taking note. Among respondents to a recent Oracle/KPMG survey, 40 percent said they feel more secure having their data, applications, and operations on the public cloud than on premises.

That’s good news to chief financial officers, who covet the shift from a capital expenses spending model (“CapEx”) to one focused on operational expenses (“OpEx”).

CFOs tend to view OpEx as less costly, since it allows them to pay for computing services on an as-needed basis instead of buying expensive equipment with a big up-front payment. Renting or building a place to house all this equipment, the costs of setting up and maintaining it, the depreciation in its value over time, and other costs make the OpEx model that the cloud affords attractive, indeed.

Relieved of the need for a large cash outlay, CTOs migrating and modernizing to the cloud can spend less on computing infrastructure in a given month or year. As a result, they gain flexibility in their budgets that lets them shift spending priorities according to changes in the market, and scale up or down as demand increases and decreases.