Glossary What is an Operating Expense (OpEx)?
By null / 1 Jan 2023 / Topics: As a service Data center
Operating expenses, often abbreviated as OpEx, are the day-to-day expenses a company incurs to support business operations. OpEx is increasingly playing a significant role in IT administration as more organizations adopt service-based procurement models.
Traditionally, IT administrators leverage Capital Expenses (CapEx) — the procurement model where technology is purchased as an asset — to access new technology. This approach requires a significant financial investment and can risk a reduced or marginal return on investment due to today’s rate of innovation and modernization.
As technology ages and new platforms become readily available, OpEx offers many procurement benefits for technology. Organizations can easily modernize legacy systems and increase agility, flexibility and innovation with OpEx procurement models.
Cloud technology and as a Service (aaS) offerings use OpEx, which allows organizations to pay as they go with their technology. This has become especially prominent with software where many developers exclusively offer products through subscription models.
