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)
- 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.