Question 1

What's the difference between CapEx and OpEx?

Accepted Answer

CapEx is money spent up front to buy long-lived assets you own (like servers, storage arrays, networking gear, and data center space). OpEx is ongoing operating spend (like monthly cloud bills, support contracts, and utilities). In cloud computing, moving to the cloud often shifts spending from CapEx (buying hardware) to OpEx (paying for what you use).

Question 2

When should I use CapEx instead of cloud (OpEx)?

Accepted Answer

CapEx can make sense when you need full control over hardware, have strict data residency or regulatory constraints that require on-premises systems, have very stable and predictable workloads that run near full utilization for years, or already have facilities and staff in place. Many organizations choose a hybrid approach: keep certain systems on owned infrastructure (CapEx) and use cloud for variable demand, new projects, or faster experimentation (OpEx).

Question 3

How much does CapEx cost for on-prem infrastructure?

Accepted Answer

CapEx varies widely based on scale and requirements. Key cost drivers include servers (CPU/RAM/GPU), storage type and capacity, networking equipment, racks and cabling, power and cooling upgrades, data center build/lease costs, redundancy (N+1/2N), and security controls. You also typically need periodic refresh cycles (often every 3–5 years). CapEx is only the upfront portion—total cost of ownership also includes OpEx items like electricity, maintenance, warranties, and staffing.

CapEx

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