Why is the opex model beneficial for cloud providers?

The opex (operational expenditure) model is beneficial for cloud providers primarily because it allows them to generate steady revenue through subscription or pay-as-you-go pricing structures. This model differs from the traditional capex (capital expenditure) model, where large upfront investments are required for hardware and infrastructure. With opex, customers pay only for what they use, which leads to predictable cash flow for providers.

One key advantage of the opex model is its ability to align closely with customers' needs, enabling them to scale their services up or down based on demand. This flexibility is crucial in the cloud environment, where businesses often experience fluctuating workloads. Thus, the on-demand resource allocation feature of the opex model is not just a convenience for users, but it also represents a significant competitive advantage for cloud providers.

Furthermore, while the freemium model can attract users by allowing them to try services at no upfront cost, it often leads to the monetization of services once users are engaged. However, the ability for steady revenue generation and on-demand allocation are more foundational benefits of the opex model in the context of cloud services.

In summary, the opex model provides steady revenue generation, allows for on-demand resource allocation, and can support complementary business strategies