Azure CapEx vs. OpEx

Capital Expenditure (CapEx)

  • Upfront cost on physical infrastructure
  • You need to plan your expenses at the start of a project or budget period.
  • CapEx computing costs:
    • Server costs – server clustering, redundant power supplies, and uninterruptible power supplies.
    • Storage costs – centralized storage and fault-tolerant storage for critical applications.
    • Network costs – cabling, switches, access points, routers, wide area networks, and Internet connections.
    • Backup and archive costs – backup maintenance and consumables like tapes.
    • Organization continuity and disaster recovery costs – recover from a disaster and continue operating using backup generators.
    • Datacenter infrastructure costs – costs for construction and building equipment.
    • Technical personnel – technical expertise and workforce to install, deploy, and manage the systems in the data center and at the DR site.

Operational Expenditure (OpEx)

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  • No upfront cost but you pay for the service/product as you use it
  • OpEx is particularly appealing if the demand fluctuates or is unknown
  • OpEX computing costs:
    • Leasing software and customized features –  responsibility to de-provision the resources when they aren’t in use so that you can minimize costs.
    • Scaling charges based on usage/demand instead of fixed hardware or capacity – plan for backup traffic and disaster recovery traffic to determine the bandwidth needed.
    • Billing at the user or organization level – when using a dedicated cloud service, you could pay based on server hardware and usage.

Azure CapEx vs OpEx

Sources:
https://docs.microsoft.com/en-us/azure/cloud-adoption-framework/strategy/business-outcomes/fiscal-outcomes
https://docs.microsoft.com/en-us/learn/modules/principles-cloud-computing/3c-capex-vs-opex

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