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People are attracted to it because owning stuff sucks. Renting stuff is more expensive but sucks less. This is why businesses often prefer opex to capex even if
by sanderjd 5y ago
People are attracted to it because owning stuff sucks. Renting stuff is more expensive but sucks less. This is why businesses often prefer opex to capex even if it is pretty significantly more expensive. It isn't just an IT phenomenon.
- anitil 5y agoYep people will pay through the nose to move from capex to opex. It baffled me at first, I think it baffles me less (but still a bit) now. Maybe one day I'll understand.
- sam_lowry_ 5y agoWhat about housing? Why do people still buy housing?
- sanderjd 5y agoTwo reasons: 1. For the investment in the land the house sits on (the house itself is a depreciating asset, but the land may be a good investment), and 2. For the ability to control their own destiny, to be able to make improvements and to have a place to live that does not rely on a landlord's willingness to continue signing leases with you. Note that #2 is totally analogous to owning your own server infrastructure. You definitely give up control when you rent rather than buy compute. But I think people are more sensitive to this in their personal lives than businesses (especially small businesses); after all, you're stuck with your personal life, you can't sell it or declare bankruptcy or just shut it down if things don't work out.
- anitil 5y agoThe list of things that I don't understand only seems to grow longer, so I'm not sure, sorry.
- abrookewood 5y agoIt's an accounting phenomenon: Deducting expenses reduces income tax, which is levied on net income. It is also beneficial when considering the time value of money – money available at the present time is worth more than in the future due to its earning capacity.