The Doppler Quarterly Special Edition 2019 | Page 38

The Traditional View – CapEx vs. OpEx
Figure 1: shows the challenges of the traditional model. The blue line depicts hard-
ware purchases which are completed periodically to increase capacity ahead of pro-
jected utilization. The red arrows indicate the cost an enterprise bears in excess
capacity while the red shaded area represents the danger of underestimating
utilization.
Closely associated with utilization is IT infrastructure’s ability to scale up and scale down
to support business agility. Traditionally, high utilization reduces IT spend, but limits
agility and negatively impacts innovation and business growth. Conversely, the cloud
can provide significant savings (near 100% utilization) and nearly infinite agility. The
value of this agility is challenging to calculate so we have a tendency to ignore it. That is
a big mistake.
Are you quantifying agility?
The business value of cloud is more about agility and utilization than any other cost con-
sideration. Consider that the cloud provides us with the ability to provision and de-pro-
vision nearly unlimited resources as needed with complete control. Moving from 20% to
near 100% utilization provides significant cost advantages and even greater value in the
ability to quickly solve business problems without waiting for software and hardware
procurement and installation. With the cloud, businesses can enter into new markets,
accommodate new customers, avoid compliance penalties, or just move fast when they
need to move fast, all while concurrently maintaining fully-utilized hardware and net-
working resources.
36 | THE DOPPLER | SPECIAL EDITION 2019