![]() ![]() The cost for the software investment thus shifts from one-off, expensive capital expenditure that appears in a company’s assets as tied-up capital to flexible consumption-based, monthly operating costs – basically as a kind of subscription service. This shift significantly reduces capital expenditure because large parts of the physical infrastructure, such as servers, server rooms, or appropriately trained personnel, can be eliminated. As a result, an organization today has the flexibility to source its software according to its business needs. Increasingly, therefore, business practices are shifting from Capex to Opex. Despite budget cuts and cost pressure, however, indeed, companies can only survive in the future competition and achieve their digitalization goals with a robust IT backbone. Short-term cost reduction is now a decisive factor for SMEs to large corporations when it comes to software procurement and the associated operation. In finance departments, the IT budget is therefore increasingly becoming the focus of procurement. ![]() Another example would be renting mobile devices instead of buying them.ĭifferences in costs between Capex and Opexĭigitalization is increasingly transforming physical investments into investments in digital goods and services. This can happen, for example, in IT by shifting on-premise investments (such as the purchase of a server) to a cloud solution or managed service. The transformation from Capex to Opex thus describes nothing other than the shift from capital expenditure to operating expenditure. Opex operating costs also include the costs of cloud-based services or infrastructure-as-a-service. These include maintenance work, recurring charges for software operation such as software licenses and IT consulting services, and costs for internet services.
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