CapEx Vs OpEx: Cloud Computing

Gartner defines cloud computing as a style of computing in which scalable and elastic IT-enabled capabilities are delivered as a service using Internet technologies. So, an on-demand delivery of compute power, storage, applications and other resources through a cloud service platform via the internet.

Traditionally, IT expenses have been considered a Capital Expenditure (CapEx). Today, with the move to the cloud and the pay-as-you-go model, organizations have the ability to stretch their budgets and are shifting their IT CapEx costs to Operating Expenditures (OpEx) instead. This flexibility, in accounting terms, is now an option due to the “as a Service” model of purchasing software, cloud storage and other IT related resources.

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