Would you like to inspect the original subtitles? These are the user uploaded subtitles that are being translated: 1 00:00:00,660 --> 00:00:05,990 To better understand the financial aspect of using the cloud, there are two terms we need to know. 2 00:00:06,660 --> 00:00:09,420 These are CapEx and OpEx. 3 00:00:10,080 --> 00:00:14,940 These terms stand for capital expense and operating expense. 4 00:00:15,690 --> 00:00:16,920 Now, what does it mean? 5 00:00:17,550 --> 00:00:24,390 Capital expense or capex means that we are making upfront investment for future use or profit. 6 00:00:24,630 --> 00:00:30,780 For example, as we discussed before, we bought the fossil fuels, we paid for them upfront and then 7 00:00:30,780 --> 00:00:31,680 we just use them. 8 00:00:32,040 --> 00:00:36,180 OpEx on the other side is paying for what you actually use. 9 00:00:37,210 --> 00:00:43,930 Now, what's important to understand is that traditionally it is capex oriented, that means that we 10 00:00:43,930 --> 00:00:51,160 have major investment for building data center producing servers, purchasing air conditioning, producing 11 00:00:51,160 --> 00:00:55,240 the network devices and, of course, purchasing software licenses. 12 00:00:55,550 --> 00:01:03,070 And only then after doing all that and spending all that money, we can finally use it now, even though 13 00:01:03,070 --> 00:01:05,120 traditional it is capex oriented. 14 00:01:05,140 --> 00:01:07,870 There are also some OpEx involved. 15 00:01:07,870 --> 00:01:11,950 For example, electricity is usually paid by the month salaries. 16 00:01:11,980 --> 00:01:15,200 Of course, we pay I.T. guys every month. 17 00:01:15,370 --> 00:01:23,350 Maintenance is also an ongoing payment and more so in traditional I.T. We have mainly capex, but also 18 00:01:23,350 --> 00:01:24,700 a lot of OpEx. 19 00:01:25,450 --> 00:01:32,260 Now, if you will go back to our example, then we have those four servers now, those four servers 20 00:01:32,260 --> 00:01:33,340 are CapEx. 21 00:01:33,670 --> 00:01:35,470 We bought them at the beginning of the year. 22 00:01:35,590 --> 00:01:42,190 We paid for them once at the beginning of the year, and we just let them run not quite efficiently, 23 00:01:42,190 --> 00:01:44,220 as we saw with OpEx. 24 00:01:44,230 --> 00:01:46,990 On the other hand, what's going to happen is this. 25 00:01:47,290 --> 00:01:55,420 We first buy two servers and then we let them run throughout the year until again, we reach November 26 00:01:55,750 --> 00:01:56,500 or November. 27 00:01:56,500 --> 00:02:04,720 We add two servers, then we come prepared for Black Friday, and after that we can decrease again the 28 00:02:04,720 --> 00:02:06,240 number of servers back to two. 29 00:02:06,580 --> 00:02:10,700 And so we pay for the additional two servers only on November. 30 00:02:11,590 --> 00:02:14,950 So to summarize, these are CapEx and OpEx. 31 00:02:15,400 --> 00:02:18,430 CapEx is not optimal and not flexible. 32 00:02:18,790 --> 00:02:25,870 And OpEx, on the other hand, is extremely flexible and the most optimal method we want to use and 33 00:02:25,870 --> 00:02:28,270 this is what we get with the cloud. 34 00:02:28,720 --> 00:02:36,580 The cloud enables us to make all our investment in OpEx, which makes it much more financially efficient. 3517