A closer look at Capex and Opex

Making smart cabling investment decisions

According to market intelligence firm IDC, purchase decisions for network equipment are primarily infl uenced by investment costs (Capital Expenditure or Capex). However, operational costs (Operational Expenditure, Opex), including device administration and maintenance, is equally important to the Total Cost of Ownership (TCO) over a network’s operational lifetime.

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Decisions related to the purchasing of cabling are often embedded in formalised processes, such as tenders. Invariably, cost is one of the main points on which decisions are based. Of course, it is tempting to just look at the upfront investment, but the operational aspects are equally - if not more - important. To determine the lowest direct and indirect costs, you need to look at a wide range of factors. In a formalised process, purchasing departments tend to primarily consider the Capex aspects. After all, the results of decisions can be instantly calculated and expressed in specific fi gures. However, as a result of this approach the long-term costs are often overlooked. In any Decision Making Unit where purchasing departments and IT managers are involved in cabling, everyone will have different considerations - although we’ve seen that these are open to discussion and compromises can be reached.