
Accounting for Clouds: Stop Saying CapEx Vs. OpEx - delano
http://gevaperry.typepad.com/main/2009/01/accounting-for-clouds-stop-saying-capex-vs-opex.html
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moe
He lost me much earlier:

 _In other words, let's say you're buying a server from Dell for $5,800
dollars and you expect to use that server for 3 years. You also have to pay a
10% annual maintenance fee on that server, so the total cost over three years
is $7,540._

So a running server costs a measly 48 dollars per month in maintance?

This may be true when you're operating on amazon scales (when you _are_
amazon) but for the average website-owner power, cooling, rackspace and
_hardware failures_!! normally amount to a tiny bit more than that.

And once you take human<->machine facetime into the equation (by sending your
admins over or by hiring remote hands) amazon begins to look not too shabby
anymore.

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gevaperry
You guys seem to think that I was making an argument against using the Amazon
service and in favor of buying servers. That was not what I'm saying in that
post. I was making an argument that moving expenses from upfront costs to
ongoing expenses is not _necessarily_ a good thing. It may or may not be.
You're also assuming start-ups or small companies as customers. I'm also
thinking of larger enterprises.

Many of the issues raised in your comments are addressed in the blog post
itself and in the comment thread.

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tptacek
Um, I'm sure he's right about the terminology, but his conclusions are whack.
There certainly is a benefit to moving from capex to opex if your customers
have frozen capex, which is something we're seeing happening right now.

A previous employer, during the "nuclear winter" of Internet service providers
in 2001-2002, built a whole sales strategy around making an appliance-based(!)
shrink-wrap product work as OpEx.

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jdrock
The author seems to be thinking that people making the distinction between
capex and opex aren't making the assumptions of lower utilization, agility,
etc. that are mentioned at the end of the post. On top of this, when I use
this terminology, it comes with the understanding that opex is better because
moving costs to opex means breakeven for the customer is much easier to
achieve. Clouds = on-demand = only pay for what you need = customer makes
revenue directly on costs, rather than not.

