OpEx or CapEx With SD-WAN, which model should you opt for?


CapEx and OpEx are two terms that have been used quite a lot in the day to day corporate world. Let’s first understand these two terms and what their differences are.

To put it simply, CapEx or Capital Expenses are any expenses made by any organization which essentially are the company asset. For example, computers, servers, vehicles, etc for the company, or owning land under the company name is a company asset. Where the company is incurring expenses now in order to make profits off these expenses in the future. On the other hand, OpEx or Operational Expenses are those expenses made by the company that are required for the continued operation. Expenses that are recurring or on a subscription-based model like salary and wages, insurance fees, raw materials and supplies etc – all fall under Operational Expenses or OpEx.

But when we talk about technology, many companies are shifting to an OpEx model rather than sticking with the CapEx model. We see the majority of companies transitioning to an OpEx model as this directly helps with a better cash flow, which in turn serves to be a more profitable and smarter choice for organizations.

When we talk about networking and WAN, following a CapEx model is not only monetarily expensive, but it also drains in a lot of man power. The ease of doing business is another key factor. A fully managed SD-WAN service solution hands over its entire operation, management, security, and troubleshooting responsibility to a trusted managed service provider. By adopting a managed solution strategy, organizations can get rid of multiple vendor agreements and reap rich dividends by trusting an experienced business adviser. Hence, making the entire process a smooth hassle-free journey.

With the growing shift to Software as a Service (SaaS) solution, it is now one of the strongest trends in the IT/Software market. It is easy to say that the expenses related to a SaaS solution are that of the OpEx model. With new purchase options created, which in turn have a varied range of financial models used to pay for software. Being a subscription-based model, SaaS provides the flexibility of shifting in between expenses and understanding what model works for their company best – rather than spending a large sum on something that may or may not be required in the future. Being a cloud-based solution, SaaS minimizes the additional expenses on hardware and infrastructure as well.

With 90% of the world now sitting at home and working remotely, the need for networking and good connectivity has become a necessity than a luxury for all. For companies and industries, this becomes more of a challenge, as everything is linked to their DC and for employees to gain access to portals outside the workplace can be a difficulty, but with cloud computing taking over, network as a service (NaaS), makes it easier to deploy custom routing protocols. This is one of the most critical aspects of networking in times like this. Once things start to settle down post-pandemic, remote working and cloud computing is here to stay and to evolve the technology to different areas. Nexapp works around the NaaS model, which in turn makes networking a more financially viable option.

Adopting the OpEx Model for SD-WAN is the route many organizations are taking up, and rightly so. Working with an external vendor minimizes all the additional expenses.

  • There is a single point of contact for all the problems that a company might face.  
  • The external vendor is the one-stop-shop for all large and minute issues that an organization may experience.
  • Vendors take care of all the necessary upgrades, licensing and warranty issues that may come up, making it a hassle-free experience for the company.

Handling remote locations is not just a click away, with the new cloud-based application, it becomes extremely convenient to manage the connectivity of all remote locations with ease.  In turn, providing real-time data on the usage and the speed at each location.

With an OpEx model, there is an added benefit of an option of termination if the company is not satisfied with the product or services. Not being at the mercy of anyone. Helping businesses save time, bring down operating expenditures, and free up IT resources to focus on other value-added tasks. What else could one ask for?

In unprecedented times like these. We are all going through difficulties – emotionally and financially. A time where the majority of the businesses have taken a hit is now when these organizations are opting for solutions with less expenditure and maximum utilization of resources. This is where the OpEx model plays a vital role, wherein the majority of companies are now slowly transitioning for this model for SD-WAN, and Nexapp is your one-stop solution for SD-WAN solutions.

Click here Nexapp Technologies to know more about the financial benefits of SD-WAN.

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