Capex complications

With the credit crunch, it should be a no-brainer. CFOs should be pushing for more opex, less capex in IT. That should on surface be good for cloud computing as Larry Dignan suggests. And SaaS and leasing.

But we live in strange times.

In the last few weeks, I have seen leasing and financing deals with unattractive residual and interest terms. I have seen EBITDA calculations where a capex project actually looked better because interest and depreciation were ignored in the comparison - even though upfront cash flow looked ugly.

In the end SaaS and cloud computing will have to continue to win with overwhelming cost advantage compared to incumbent on-premise models. Every CFO, in the end understands those set of numbers.