as-a-Service Financial Alternatives

A Guide to Evaluating Data Center Infrastructure as-a-Service Offerings

Most IT infrastructure buyers are familiar with their own capital purchase acquisition processes (CAPEX). However, there have arisen at two principal reasons for IT professionals to look at the many alternatives to capital acquisition that have emerged.

First, as digital transformation projects progress, the capital acquisition process can often be seen as needlessly cumbersome and time-consuming, creating a debilitating lag between a project’s inception and actual implementation. Users now look for acquisition alternatives that are more fluid and responsive to the immediate needs of business application users. Second, as public cloud computing advances within the enterprise, payment for cloud computing services is done out of the operational expense budget (OPEX). This shift in paying for IT resources has stimulated IT organizations to look to OPEX spending as a way to acquire on premises IT resources with the same speed they experience in the cloud.

This report looks at the “as-a-Service” alternative to capital purchase now available to on-premises IT infrastructure buyers.

As-a-Service

Public clouds ushered-in the concept of using IT resources as-a-Service that were paid for on the basis of services consumption. They also share with IT infrastructure leasing a core concept: that users do not have to own IT infrastructure to derive benefit from it. In both cases, someone else owns the infrastructure. And in both cases the IT user is rewarded with all of the benefits that IT infrastructure delivers. Other aspects of delivering infrastructure as-a-Service that are similar to leasing include:

Fixed contract term – as-a-Service contracts are typically fixed-term meaning that they have a definite beginning and a definite end. And like leasing contracts, the customer is obligated to return the infrastructure to the vendor at the end of the term unless otherwise stipulated.

Unencumbered use – As long as the customer holds true to its contractual obligations, the customer has unencumbered use of the infrastructure.

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