Technology CapEx and OpEx Budget Planning Tricks of Successful Small to Medium Businesses – Free Webinar Replay

Webinar Introduction

Presented by Robyn Howes – May 1, 2025

Welcome to today's webinar! We’re talking about CapEx vs. OpEx in technology budgeting, including practical tips for small to medium-sized businesses on how to drive revenue while reducing costs and risk.

I'm Robyn Howes, owner and founder of Certified NETS. We’ve been in business for 23 years, serving small to medium-sized businesses that prioritize both technology and security. We’re a customer service firm that happens to do technology. We’re also an award-winning managed services and security provider, and we’re excited to bring you this timely discussion.

Why This Topic Matters in 2025

This year is a key moment to evaluate whether operational expenses (OpEx) or capital expenses (CapEx) make more sense for your business. Here’s why:

• Windows 10 is going end-of-life, prompting many businesses to consider replacing their fleet of computers.
• Microsoft is increasing license costs, but discounts are available for annual payments over monthly billing.
• Businesses must decide whether to adopt a monthly subscription model or stick with traditional one-time purchases.
• Vendors across the board are raising prices.
• Windows Server 2016 is going end-of-life by January 2027—another looming investment.
• Economic uncertainty, potential tariffs, and inflation may make buying now more attractive than delaying.

The Laptop Replacement Scenario

For this discussion, let’s consider a hypothetical situation: You need to replace 13 aging laptops with Windows 11 devices.

• Assumed cost per laptop: $2,000
• Total upfront CapEx: $26,000
• Leasing alternative: $870/month for 36 months ($1,320 more than paying upfront)

This 5% additional cost reflects interest, but it may be worth it for businesses needing better cash flow management. Keep in mind: most upgrades also require monitors, headsets, docking stations, peripherals, software, and labor—so 13 laptops could easily equate to that $26,000 total investment.

What Is a Capital Expense (CapEx)?

CapEx refers to acquiring long-term assets like:

• Hardware (e.g., servers, PCs)
• Software licenses
• Infrastructure (e.g., building out a data center)

These purchases are recorded as assets on the balance sheet and depreciated over their useful life—typically three years for laptops.

CapEx Benefits:

• Full ownership of the equipment
• Potential resale value
• Tax depreciation spreads over several years
• CapEx Drawbacks:
• High upfront cost
• Less flexibility

When Is CapEx Beneficial?

CapEx is often advantageous when:

• Long-term cost is lower than leasing
• You want to improve productivity with newer, more reliable hardware
• Your business can benefit from tax deductions over time

What Is an Operational Expense (OpEx)?

OpEx includes day-to-day business costs like:

• Software subscriptions (e.g., Microsoft 365, Azure)
• Cloud services
• Leases
• Utilities
• IT support contracts

Accounting:

OpEx is deducted in full during the year it is incurred and recorded on your income statement.

OpEx Benefits:

• Lower upfront cost
• Predictable monthly payments
• Flexible scaling (add/remove licenses or services easily)

OpEx Drawbacks:

• Higher long-term cost if not monitored
• CapEx vs. OpEx: Accounting Differences
• CapEx purchases are capitalized, then depreciated (tangible) or amortized (intangible) over time.
• OpEx costs are deducted in the year they occur, reducing taxable income immediately.

From a tax perspective, OpEx is often preferred, which is why many businesses lease equipment instead of buying outright.

However, if a business wants to increase its book value or report stronger net income, CapEx may be the better route.

When to Use CapEx vs. OpEx

CapEx is better for businesses that:

• Have predictable tech life cycles
• Want to own their equipment
• Seek long-term growth benefits

OpEx is better for businesses that:

• Need agility and flexibility
• Operate in fast-changing industries
• Prefer lower upfront costs

Ultimately, the choice depends on your business goals and cash flow strategy.

How to Evaluate Your Device Fleet

Let’s revisit the need to replace Windows 10 devices. How did we determine we needed to replace 13 machines?

Audit Device Age

• 4+ years old: Often not worth upgrading to Windows 11 due to performance and compatibility issues.
  • Option 1: Replace them.
  • Option 2: Use Microsoft’s Extended Security Updates for $61 per device/year.
• <2 years old: Typically compatible with Windows 11—upgrading is recommended.
• 2–4 years old: Decision depends on hardware specs and warranty status.
  • Key specs to look for: TPM chip, 16 GB RAM, 500 GB hard drive.
  • If not compatible or underperforming, consider Extended Support and keep on Windows 10.

Final Thoughts: Choosing the Right Spending Model

Once you've assessed how many machines to replace, then you decide:

• CapEx: Pay $26,000 upfront for hardware and software.
• OpEx: Lease through a 36-month plan at $870/month with a $1 buyout at the end.

This gives you guaranteed ownership for three years—aligned with the warranty period—and spreads your cost over time while maintaining technology lifecycle consistency.

Ready to Take Control of Your IT Budget?

Learn how to make smarter technology investments that align with your business goals. Whether you're considering a major equipment upgrade or evaluating subscription services, understanding the CapEx vs. OpEx conversation is key.

Schedule a free consultation with Certified NETS to discuss your IT strategy and get expert guidance tailored to your business.

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