Monday, January 27, 2014

CAPEX vs OPEX


In times of tight budgets and tighter timetables, one of the interesting options organizations have for major projects is between capital spending (capex):  outright purchase and use over time and operational expenditure (opex):  making regular monthly payments.   The simplest analogy is choosing between purchasing a car (capex) and leasing it (opex).

Benefit of the Capex Model:
A purchase may give an organization valuable depreciation tax benefits.  Depending on the organization's cost of capital, it may also be cheaper for an organization to purchase it rather than lease it.
Benefit of the Opex Model:
Opex does not require an organization to make a major initial investment.   Many organizations have additional procedures for major purchases, which requires a great deal of labor and slows down the purchase of an important system.   Many people enjoy leasing a car, because they receive a brand new vehicle with the newest features when the lease is renewed:  this would be a huge benefit for the lease of a technology system.

Unlike a car lease with a fixed term, many opex programs are monthly or otherwise short term.   A short term lease allows organizations to rapidly change systems as their needs grow or change.   Purchased systems will not become obsolete in the face of changing technology.   The advent of cloud systems essentially removes the term, with rapidly scalable transmission and networking power provided as needed.

eMAM offers both Capex and Opex Models:
eMAM has offerings for organization for any purchasing paradigm:   systems installed on organizational hardware, leased on Empress hardware, or deployed on flexible cloud platforms.   We can provide systems for full media asset management, for LTO drives, for ingest stations, or for archive systems.   Companies can also avoid purchasing decisions altogether by using services from Empress and its partners for digitization, digital delivery, LTO delivery, or other services. 

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