« Next Gen Infrastructure Virtualization v. Infrastructure Management | Main | Networking for the Cloud - Musings to Myself (and Doug... and Greg...) »
Sunday
Jan112009

Accounting for Cloud Fans - Clouding for Accountants & CFOs

Geva Perry has done us a favor by taking something of a purist's stand on the definition of Capitial Expenditure and Operating Expenditure as it relates to cloud computing/utilitycomputing/Xaas.  He's keeping folks honest about the use of terms and (hopefully) prevents the mistake that many are making about the "inherent benefit" of moving expense from CapEx to OpEx.

What's interesting is the heated commentary generated by the post.  The economic/accounting benefits of using someone elses plant rather than buying your own has, as is pointed out, a great deal to do with context.  Variability in usage/demand, variability in the cost of capital, and a host of other variables (technical, operational and financial) play into the viability of XaaS.  This conversation is doing a reasonably good job of collecting them in one spot.  Recommended reading.

Thinking Out Cloud: Accounting for Clouds: Stop Saying CapEx Vs. OpEx

Going back to the title of this post, my point in all of this is not that there are no economic benefits to cloud computing, but that whatever those benfits are, they have nothing -- absolutely nothing -- to do with CapEx vs. OpEx, so please don't say that anymore!

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
All HTML will be escaped. Hyperlinks will be created for URLs automatically.