Why More CFOs Are Shifting IT Investment From CAPEX to OPEX

Traditionally for technology investments, CFOs most often preferred capital expenditures over operating expenses because they could take advantage of the amortization and depreciation of those investments over an extended period. There’s a growing argument, however, that operating expenditures (OpEx) have distinct advantages over capital expenditures (CapEx).

Operating expenses are used for the day-to-day costs of running a business and can be more stable. But technology developments are occurring faster than companies can digest and are the reason many CFOs are shifting from capital expenditures to operational spending.

The cloud is a perfect example of how to apply OpEx for technology expenditures. As an operating expense, the cloud allows a company to:

  • Pay only for the capacity it needs now and scale as requirements change
  • Ease and speed up the budgeting process because short-term spending requirements are lower
  • Make multiple investments across the business since capital isn’t tied up in large upfront expenditures
  • Fund expenses faster through operations rather than needing to borrow money or divert money from other projects to pay for large, upfront technology costs
  • Smooth out cash flows over time instead of requiring lumpy outlays

Cloud Offers a Path to the Future

If you’re looking to reduce communications costs, the cloud can save you money:

  • No costly, upfront investments in servers, switches, and PBXs
  • No budget “surprises” – consistent, predictable calling plans
  • No costly, across‐the‐board software upgrades as new features and versions are released – you get the latest versions immediately, automatically
  • No wasted money on over-provisioned trunks or underutilized hardware
  • No high energy and cooling costs to run a roomful of equipment, and rent to house it all

The cloud offers a better path for growth. It not only saves you money through economy of scale, but also scales cost‐effectively as you grow. You never have to worry about adding more servers and switches as you add more employees. You simply add more seats in the cloud at a fixed monthly cost and have the assurance that new employees are connected to all your business communications from day one.

Ready to talk about your path to the Cloud? Contact us today: (703) 321-3030 or info@tcicomm.com.

 

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