When comparing IT infrastructure models, there are two types of expenses to consider:

• Capital Expenditure (CapEx)
• Operational Expenditure (OpEx)

🏗️ CapEx (Capital Expenditure)

CapEx is typically a one-time, upfront expense to acquire or secure tangible resources.
Examples of CapEx:

• Building a new facility
• Renovating a parking lot
• Creating a data center
• Purchasing a company vehicle

🔄 OpEx (Operational Expenditure)
OpEx refers to recurring expenses for services or products.
Examples of OpEx:

• Renting a convention center
• Leasing a vehicle
• Subscribing to cloud services

☁️ Cloud as an OpEx Model

Cloud computing falls under the OpEx model because it operates on a consumption-based model.

You do not pay for physical infrastructure, electricity, security, or data center maintenance.
You pay only for the computing resources you use.
If you use nothing this month, you pay nothing.

✅ Benefits of the Consumption-Based Model

• No upfront cost
• No need to purchase or manage expensive infrastructure that might be underutilized
• Flexible payment based on needs
• Stop paying for unused resources

🏢 Comparison with a Traditional Data Center

In a traditional data center:

• You must anticipate future needs.
• If you overestimate, you waste money.
• If you underestimate, your services may suffer performance issues.
• Correcting under-provisioning can be long and costly (purchasing, delivery, installation of hardware, adding power, cooling, networking…).

☁️ With the Cloud

You don’t have to guess exact needs.
If you need more virtual machines, you add them.
If demand drops, you remove them.
You pay only for what you use, not for excess capacity.

📊 Compare Cloud Pricing Models

Cloud computing is based on a pay-as-you-go pricing model.
You pay only for the cloud services you use, which helps you:

• Plan and manage operational costs
• Optimize your infrastructure
• Scale capacity as your needs evolve

In summary, the cloud is a way to rent computing power and storage in someone else’s data center.
You can treat cloud resources like those in your own data center, but once you’re done using them, you return them.
You are billed only for what you use.

➡️ Next unit: Module Assessment