Opex pitch not the magic bullet


Opex pitch not the magic bullet

Simon Quicke

In these tough economic times the channel has moved away from a capex sale towards the apparent attractiveness of selling more flexible pay-as-you-go opex alternative, but it might not be that successful for resellers.

One of the benefits of capex funding is it's predictability and opex can cause potential problems because of the future uncertainty about maintaining the commitment.

Alistair Edwards, principal analyst at Canalys, said that the risks with opex were that if the business dipped and a commitment to find monthly payments had been made it could put the squeeze on other parts of the business.

He warned that cuts could have to be found in the business if firms were struggling to keep to their opex schedule of payments.

"The economy is hindering the shift to opex models. With capex the investment is predictable but when you move to the opex model you need to make sure you can pay a monthly annuity fee," he said.

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