CapEx vs. OpEx: Expanding IT Infrastructure to New Office Locations

This blog is part of our Tribridge Cloud Playbook series, which is designed to help IT professionals proactively address common business disruptors.

Nothing tests the limits of an IT system quite like needing to expand to a new location. In addition to the obvious challenges to the individual site's infrastructure, it also tests company-wide systems, such as purchasing, service agreements and standardized infrastructure. For this reason, many companies see expansions as an opportunity to re-evaluate their entire IT systems and proactively seek improvements.

In most scenarios, this reevaluation leads to two possible options. While these two options are most commonly called on-premise and cloud, we prefer to think of them as "CapEx" and "OpEx."

The CapEx Option

In this scenario, the company makes a large upfront capital investment to supply the new office with a full suite of on-premise servers. This is most companies' default option – mainly because, until recently, it was their only one. Before cloud technology made it possible to host both infrastructure and data remotely, companies had little choice but to duplicate some or all of their infrastructure at each individual location. What's more, this decision has long-term ramifications, often without flexibility.

The OpEx Option

Instead of buying on-premise infrastructure to outfit a new location, many companies are treating office moves as an opportunity to move some (or all) of their IT to the cloud. By transforming a large hardware investment into a relatively small ongoing service charge, this option transforms a large capital expenditure into an operating one. This accounting change alone can have significant short-term financial benefits for the organization.

Choosing OpEx also delivers long-term benefits. Unlike on-premise investments that tie companies into long term maintenance, cloud solutions actually make organizations more flexible. Scaling resources up or down is simple, especially when it has to be done rapidly (such as the merger of two separate IT systems).


Even in office expansions, where an on-premise solution seems like the natural choice, it's a good idea to consider a cloud solution as well. Innovations in cloud infrastructure are happening very quickly, and something that may have required on-premise infrastructure a few years ago now have a new purpose-built cloud offering available. Choosing the cloud can make your organization more agile, scalable and flexible all in one shot. Making sure that you evaluate cloud solutions before you make a decision is the most important part of making the right one.

For more solutions to potential pitfalls that lead to sub-optimal IT infrastructure decisions, check out the Tribridge Cloud Playbook and our infographic.

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