The Capex-To-Opex Shift: Doing More With Less

In an era in which the cloud can reduce capital expenditures on technology and shift that spending into services, many enterprises prefer sticking with a capex model, Gartner analyst Jim McGittigan told attendees at MES.

McGittigan's chief message to IT directors? Focus on reining in the average 4 percent of enterprise spend on IT through such tactics as renegotiating contracts; automating processes; and simplifying platforms, applications and services. And start by looking at Software-as-a-Service (SaaS) options.

Gartner believes that most CEOs and CFOs don't understand IT operating expenses and believe that, on average, 20 percent of the IT operating budget is wasted money. McGittigan recommends that midmarket IT directors understand and optimize all IT spend. And as for the 96 percent of IT spend in the business units? "Find it and make sure it's governed appropriately," the Gartner analyst said.

What solution providers can do: Focus on service provision, especially SaaS and any managed services that can help IT shift costs from capex to opex, or reduce costs that are already part of opex.