What’s Opex & Capex
Opex & capex are two major terms of asset or resource management system. Opex denote the operating expenditure & capex means capital expenditure. Both helps to measure and record the cost, amount of deprecation, transfer & many other financial criteria of assets. The correct & appropriate use of identification & classification helps to reduce the cost and proper use of capital or resources.
In general cost on computer equipment is relative costs including software, desktop or laptop or both type computer, and server type computer equipment together with equipment peripherals such as printer, scanner, modems and many other that satisfy personal or organizational capitalization threshold.
Laptops & desktop computers are purchased or leased. Leasing approach abolish upcoming cost on hardware. When purchased, cost goes under Capex. On the other hand when leased, cost goes under Opex. In general capex are cost, expend during purchase. It is fixed cost for equipment. Opex are running or maintenance costs over capital asset have to spend within a fixed interval of time or due to some particular reasons. As for say when you purchase a modem in purpose of using internet service the cost of purchasing goes under capital expenditure or Capex. But the cost you have to pay monthly or yearly or any other time period goes under operating expenditure or Opex. Cost of printer, copier goes under Capex but cost of ink, paper goes under opex when related to printer or copier.
As regards cloud economics in cloud computing, This pass on to the reality that storing your own data center needs capital costs (Capex), while passing through an outer cloud service that propose service as well as pay as you go counts into enduring operating expenditures (Opex).
At a glance Capex relate to computer & its peripherals:
- Cost of purchasing machines such as Desktop & laptop computers.
- Cost of purchasing peripherals such as printer, scanner, modems, pen drives etc.
- Cost of purchasing operating system.
- Cost of purchasing other software such as anti-virus program, downloader etc (freeware should not match this criteria).
- Cost of installation.
- Cost of purchasing equipment due to sudden fall of any component.
At a glance Opex relate to computer & its peripherals:
- Cost of leasing equipment.
- Cost of renewal licenses & agreement.
- Cost of running server & hosting website.
- Cost of internet service.
- Cost of electricity.
- Cost of security & management.
- Cost of maintenance.
- Cost of depreciation (if any).
- Cost of paper, ink for printer.
- Cost of CDs, DVDs for record or backup.
New day’s commercial thought follows Opex. Commercial policy makers prefer Opex more than Capex due to less starting cost or capital cost, much more security & reliability of service given. Another commercial aspect is given in contrast; when you purchase a car you have to make a lot of payment at a time. Also you have to maintain it however you use it or not. But when you rent a car, you have to pay as you go. After payment you have no more financial liability.