It’s because of how accounting works (opex vs capex). I don’t know if there are tax reasons but a major reason opex is preferred to capex is that the former is tied directly to cash flows. Cash flows are the lifeblood of a business being profitable and makes it easy to balance costs and revenues whereas capex is a long term investment (ties up your capital).
There are secondary order effects going on here to explain this. Also, in your example the 50k number isn’t including the rack space rental costs, technicians to maintain the hardware, and OPs people to keep the deployed software running (software updates etc).
There's no tax or cash flow reason here. We have full autonomy and it's a fraction of our revenue and profit.
Rack space is included in my pricing there. As for technicians, we still have to employ the same number of people. Instead of having 2x DC techs and 2x DBAs we now have 4x devops engineers and 2x DBAs.
Comments
It’s because of how accounting works (opex vs capex). I don’t know if there are tax reasons but a major reason opex is preferred to capex is that the former is tied directly to cash flows. Cash flows are the lifeblood of a business being profitable and makes it easy to balance costs and revenues whereas capex is a long term investment (ties up your capital).
There are secondary order effects going on here to explain this. Also, in your example the 50k number isn’t including the rack space rental costs, technicians to maintain the hardware, and OPs people to keep the deployed software running (software updates etc).
There's no tax or cash flow reason here. We have full autonomy and it's a fraction of our revenue and profit.
Rack space is included in my pricing there. As for technicians, we still have to employ the same number of people. Instead of having 2x DC techs and 2x DBAs we now have 4x devops engineers and 2x DBAs.
There is no saving here for us.
To note we have 12 of these nodes.
Well there you have it, if money isn't really an issue, the cliche works well, no one got fired for suggesting the cloud.