Data Center vs Cloud – CapEx & OpEx

This video looks at the benefits of data center vs cloud, comparing both from a capital expense (CapEx) and operational expense (OpEx) perspective.

data center vs cloud

As many companies are discovering, the drive to lower costs. Removing the need for data center hosting, rack space, power and cooling together with disaster recovery (DR) sites which are underutilised and not used until a disaster, is really only the first step on the cloud journey.

The cloud opens up all sorts of possibilities for innovation, which makes not only IT better, but provides direct benefit to the business, driving value, profit and growth.

This can be useful for a non technical audience to explain the benefits of moving to the cloud from a datacentre (on premise) environment from a consumption, time and financial point of view.

The video below shows data center vs cloud comparison table.

Datacenter (CapEx)Cloud (Opex)
Purchase computing equipment (capital expense). For example, servers, networking, storage, data center hosting, rack space, power and cooling together with disaster recovery (DR) sites which are underutilised and not used until a disasterPay for what you use, similar to a telecom provider (operational expense)
One time purchase followed by several years of depreciationPay as you go on demand. If demand decreases turn off or remove systems (no charge)
Purchase x3 or x4 hardware to insure apps meet peak usageOptimize use of cloud on day-to-day basis, adjusting consumption and utilization to achieve their cost goals
IT could easily spend 80% budget leaving small amount for innovationOnly provision what you require at the time of requirement, saving costs
Max utilization must be planned for and provisioned, financially inefficientCan scale up or out resources instantly
Taking a very long time to provision new resources. Time is moneyInstant provisioning on demand, lead times shorten increasing profits
Letting your equipment dictate your business approach, rather than your business needs driving your IT infrastructureFlexible, adaptable and scalable cloud services to meet ever changing and new requirements
Sacrifice agility when investing time, money, and manpower into a capital expenseCloud services are very agile. Can automate, add, remove or change resources instantly
Paying staff to “keep the lights on” when they could be contributing to better products and processes. Either you’re taking staff from what they were originally hired to do or paying additional staff. Either way, profits are at riskFrees the mundane tasks of system backup, network maintenance, patches, and software upgrades. Increasing employee productivity


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