The transition of companies and public institutions to cloud computing is opening up new opportunities for IT management: scalability, centralized management, simple integration and use, and many other advantages that justify the dizzying development of cloud computing in IT management. Yet cloud computing also calls into question the economic strategy of IT expenditures in terms of investment vs operations. Here’s a closer look on a new investment strategy.
What does cloud computing change?
IT expenses for companies and public institutions often used to automatically involve CapEX for financial services. The notion of CapEX (for “Capital Expenditures”) refers to fixed assets (investments) meant to sustainably serve the company’s business. Fixed assets can be grouped into three main categories:
- Intangible assets: intellectual services (training, integration, development, etc.), software and so on
- Tangible assets: monitors, CPUs, printers, etc.
- Financial assets: titles, shares, loans, etc.
Conversely, the term OpEX (for “Operational Expenses”) refers to all the costs relating to the operations and function of companies, such as the water bill, electricity, telephone bills, salaries, office equipment, and so on.
In order to properly understand the difference between OpEX and CapEX, let’s take the example of a photocopier. Purchasing a photocopier is an investment; it usage will extend over several business years and will involve staggered payments or installments. On the other hand, expenses relating to ink cartridges and paper involved in its normal functioning, will be consumed and will participate in the functioning of the company.
By offering monthly billing, cloud computing involves operational expenditures (or OpEx), which is a revolution in the traditional investment model relating to software commercialized using perpetual licenses.
Cloud computing breathes new life into your investment strategy!
Investments relating to computer infrastructures (servers, computer terminals, purchasing software, etc.) are heavy and often require some homogeneity in the stock of equipment.
Cloud computing gives you the opportunity to migrate some of your investments (servers, terminals and essential software) to OpEX-type operational expenses, which are more agile, flexible and predictable!
Opting for cloud computing therefore has many financial advantages:
Meet the elasticity of the demand
The OpEX-type economic model lets you control your stock of assets at the pace of your users’ needs or to meet the needs of the company. Companies that experience seasonal business can therefore increase or reduce their stocks of assets very easily!
Reduce financing costs
Switching to cloud computing helps to reduce financing costs in that initial funding is provided by the producer/suppler of the cloud solutions.
Conserve your treasury and your borrowing capacity
By choosing cloud computing, your equity remains available. Your treasury will be conserved, thereby reducing your working capital needs. Furthermore, by accounting for monthly payments for operations, you’ll be retaining your borrowing capacity, which will stay intact (off-balance borrowing).
Reduce operational costs
Monthly billing will allow you to pay only for what you consume. That way, you’ll be reducing the risk of non-profitable infrastructures, but also your expenditure for energy, maintenance and human resources, which are all provided by the cloud solution producer. These result in great savings for your IT systems!
ceBox®: the virtualization solution to serve your investment strategy
In 2016, Wisper launched the ceBox® virtualization solution. This is a highly innovative solution that breaks away from traditional VDI solutions. The idea is to completely do away with the server infrastructure, execute computer terminals locally for maximum performance, all offered in the form of a monthly subscription, including the ceBox® technology, the cloud service, the Intel NUC set, maintenance and support for the solution. Our cost studies show that the solution can save up 40% on your computer terminals, all while facilitating the management of your treasury and optimizing your investment strategy!