CAPEX, or Capital Expenditures, are the resources devoted to the purchase or creation of fixed assets: servers, networks, equipment, software licences, physical data centres, etc. These purchases are depreciated over several years and represent a lasting but rigid investment. These purchases are depreciated over several years and represent a long-term but rigid investment.
The CAPEX approach, historically used in IT, implies that the company itself invests in the infrastructure: purchase of machines, on-site hosting, management and maintenance by its internal teams.
This model requires long-term anticipation of needs, with a high immediate financial commitment, and raises the issue of managing equipment obsolescence.
| CHARACTERISTICS OF THE CAPEX MODEL | EXPLANATIONS |
|---|---|
| Type of investment | Purchase of servers, storage, network equipment, premises, perpetual software licences |
| Accounting treatment | Fixed assets on the balance sheet, multi-year depreciation, heavy budget to allocate from the outset |
| Freedom and control | Physical possession, in-depth control of security and physical management of equipment |
| Constraints and risks | Risk of rapid obsolescence, maintenance and renewal required, in-house operational and technical workload |
The CAPEX approach is still appropriate for companies with very specific requirements or legal obligations to localise data, for those with solid in-house technical skills, or for those who want to have control over all aspects of their IS. But in most modern contexts, the OPEX model with the cloud offers greater flexibility, simpler management and financial security.
- Full control: total control of hardware and software infrastructure, with the option of customisation.
- Capitalisation: the value of the equipment belongs to the company, which can value these assets on its balance sheet.
- Autonomy: choice of location, physical security and methods of access to the infrastructure.
THE LIMITS
- Initial budget very high and tied up.
- Difficulty in upgrading the infrastructure (adding or removing resources is often slow and costly).
- Complex internal management, hidden costs associated with equipment maintenance and obsolescence.