SME Growth Booster: Cloud’s OpEx Advantage

Cloud’s OpEx approach provides two kinds of advantages: Flexibility and agility. Cloud solutions are not only fiscally good, but they also solve many problems that the conventional approach of investing in building your own private infrastructure created in the past.    

In this post, we look at some of the major benefits of operational expenditures in the context of intangible IT goods, such as cloud services.   

Benefits of OpEx IT expenses-   

To start with, operational expenditures (OpEx) allow you to buy on an as-needed basis. This allows businesses to avoid investing in something that does not generate profit immediately. Another major win is in the area of scalability. As an organisation, you won’t be overburdened with surplus equipment or over-complicated systems that your business does not consider essential and therefore decreases financial wastage.   

The OpEx approach is the most cost-effective approach in the industry. IT OpEx method saves businesses major expenditure costs and also ushers the ability to quickly change directions to meet market demands. With cloud services, this approach’s benefits get amplified in scale and effectiveness.   

Cloud services are often priced by the service industry standards. The pricing is based on this understanding that IT needs can be diverse- change from industry to industry, firm to firm. Just as a full course dinner cost more than a fast-food combo, your IT needs may be premium or basic. When it comes to the practicality of pricing- sometime we might want to try an expensive dinner to sate your appetite and in a different situation, a combo- or several combos that are perhaps cheaper than the complete meal suits your requirement. Cloud providers recognize this, and they tend to have services priced according to how robust they are, on top of how often you use them.   

OpEx purchases also provide you flexibility in terms of contractual commitment. A typical OpEx contract does not require strict, long-term business contracts. The pay-as-you-go cloud services usually have a service term of not more than a year and the contract terms aren’t very stringent. If the service is not up to the organisational requirement, it’s easy to terminate them and sign on with someone new who meets them. The deliverables are quick, time-sensitive and easy to adopt. No need to arrange for space, equipment, or manpower. The vendor will ensure that you are provided with so that all you have to do is sign up and receive service.   

OpEx services are rented and not owned by the users. This removes the responsibility of keeping them up and running. Infrastructure management and maintenance are not within the user’s purview. The vendor is responsible for ensuring service is always available and functional. As a beneficiary, the company can focus on expanding its business and any sort of secondary capacity management task that creates distraction can be completely avoided. The company is free to adopt new and improved plans as necessary and can stay on top of market strategies and technology upgrades to maintain competitiveness.   

With Cloud services, a firm is never compelled to craft strategies based on what they possess or own. Under OpEx’s predecessor CapEx, data storage was an investment in space, hardware, software, maintenance, and manpower. Companies that invested in them, valued everything with the lifespan of each item in mind. This changed with the introduction of cloud solutions, today the value of assets is found in their flexibility.    

With the help of the cloud and its OpEx advantage, the true value of usage pricing (vs. a fixed fee model) and the flexibility it brings can be realised. This is a powerful advantage that in the fast-paced world of business, translates into the capacity to quickly and knowledgeably respond to changing market trends, meet evolving customers’ needs and boost profits and overall value of the business.