SaaS: CapEx, OpEx…

If you are dealing something related to SaaS or Cloud computing, then you must have heard these terms very frequently. I wanted to understand it better and found useful information in Wikipedia

Capital expenditures (CAPEX) are expenditures creating future benefits. A capital expenditure is incurred when a business spends money either to buy fixed assets or to add to the value of an existing fixed asset with a useful life that extends beyond the taxable year. Capex are used by a company to acquire or upgrade physical assets such as equipment, property, or industrial buildings.

An Operating expense, operating expenditure, operational expense, operational expenditure or OPEX is an on-going cost for running a product, business, or system. Its counterpart, a capital expenditure (CAPEX), is the cost of developing or providing non-consumable parts for the product or system. For example, the purchase of a photocopier is the CAPEX, and the annual paper and toner cost is the OPEX. For larger systems like businesses, OPEX may also include the cost of workers and facility expenses such as rent and utilities.

Some useful links
CAPEX/OPEX from Project’s Manager point of view
CAPEX vs OPEX: What is the difference?
SaaS decisions: Cap Ex vs Op Ex
Accounting for Clouds: Stop Saying CapEx Vs. OpEx

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