The Doppler Quarterly Special Edition 2019 | Page 37

tions, identifying and making the right economic decisions requires additional investiga-
tion into the detailed costs and benefits of enterprise cloud.
Thinking Beyond CapEx vs. OpEx
Most enterprises have hardware utilization rates significantly below 20% because of the
excess capacity required to handle peak demand. As such, many companies carry up to
five times the required hardware, networking, and data center space during steady state
business cycles. If their computing demand is spiky, utilization rates outside of peak
cycles are commonly below 10 percent. As a result, enterprises are spending much more
on compute and storage than is required. Figure 1 depicts the traditional model where
cloud shifts fixed CapEx expenses to variable OpEx expenses. To understand the full
value of cloud for your enterprise, you must look beyond the CapEx vs. OpEx benefits
and assess the other value drivers at play.
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