Consider SaaS over On-Premise to Lower CAPEX & OPEX

Calculating Capital Expenditure

Capital expenditure (CAPEX) is the one-time expense for implementation. It consists of hardware costs and software costs.

Hardware Costs for On-premise Projects

• Procuring servers
• Software licenses
• IT resources to install, configure, and manage new hardware

Hardware Costs for SaaS Projects

• No cost, no hardware involved, and the system operates entirely through the cloud
  (over the internet)

Software Costs for On-premise Projects

• Upfront license costs
• Maintenance costs
• Cost of solution customization as per business requirement (customized forecasting models)

Software Costs for SaaS Projects

• There are usually no up-front costs

Calculating Operational Expenditure

Operational expenditure (OPEX) is the ongoing costs for running a process. OPEX includes the money spent on regular maintenance of the IT infrastructure. It consists of subscription fees and IT maintenance costs.
Subscription Fees:A periodic (monthly, yearly, or seasonal) fee to gain access to the product or service. It typically includes the licence, support, and other fees.
IT Maintenance Costs for On-premise Applications

• Update and upgrade costs for new capabilities and enhancements
• Costs associated with delays and system downtime

IT Maintenance Costs for SaaS Applications

• No cost, the vendor is responsible for updates and upgrades which are usually
  seamless and subject to standard service level agreements (SLAs).