Chapter 15: Billing and Pricing

Many companies looking to move to the cloud have heard of the cost benefits associated with shifting from a CAPEX model of investment in IT to an OPEX model. CAPEX refers to capital expenditure for the procurement of long-term assets such as infrastructure equipment, vehicles, and buildings. A company that purchases such assets will own those assets, but this tends to tie up capital that could otherwise have been spent on other resources that directly benefit the business. Consider a company having access to spare capital to invest in research and development of their products and services, as opposed to simply purchasing IT infrastructure equipment.

OPEX refers to operating expenditure and is an ongoing cost for running a product, business, or system. In the context of cloud computing, OPEX is the ongoing cost of leasing resources from the cloud provider, such as running a fleet of web servers, where the business is charged on a pay-as-you-go model...