IT Capital Expenditure vs. IT Operating Expenditure: Which makes sense for your business?

IT Capital Expenditure vs. IT Operating Expenditure: Which makes sense for your business?

2020-07-24T17:34:22+00:00By |Uncategorized|

Well, what should it be – buy or lease your IT infrastructure? Two titanic strategies are fighting it out for supremacy, and there can be only one winner.

CAPx

This is the way it’s always been done, and the concept is straightforward enough: you pay up front to purchase all the hardware, software, and peripherals that you’re going to need, planning for a specific lifecycle. You handle installation, configuration, and day-to-day management. Outside of limited (usually very limited) warranties, you take responsibility for whatever breaks, and you have to fix it. You pay more up front, but you maintain absolute ownership and control, in the most immediate hands-on sense, of all aspects of your IT infrastructure. The gear you buy shows up on your balance sheets as a company asset, and you might even gain tax benefits too, through purchase or depreciation.

OPx

This upstart strategy is gaining traction in a lot of companies, and for some good reasons. Rather than buying a lot of new hardware and software, you subscribe to it instead. You pay a single monthly fee throughout the lifecycle of your products, without any significant up-front cost, keeping a lot more capital on hand than you would with an outright purchase. You lose in-building, hands-on physical control of your servers—but you lose a lot of hassle too, as maintenance, management and upgrades are seamlessly handled by your vendor. Configuration, security, backup, disaster recovery and other vital tasks are handled outside too, cutting down on the manpower and in-house expertise needed to keep your system performing at its highest potential.

So, which option sounds right for your company? If you need help deciding, contact the strategy superheroes at Red Level – we’ll be happy to help.

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Red Level
As a comprehensive technology services company, Red Level delivers customized scalable technology solutions designed precisely to our client's unique needs – solutions that accelerate growth, reduce costs and enable collaboration. As a preferred partner to technology leaders such as Microsoft, DellEMC, and VMWare, we deploy the most advanced business technology solutions, ensuring optimal reliability, productivity and value.