Actually, since the servers themselves are physical assets with a useful life, and indeed could be leased independently from the business model during that useful life, they'd be modeled as depreciation not amortization. But yes, EBITDA would be increased either way.

Realistically, the valuation multiples on EBITDA for mature SaaS businesses are different from those for datacenter operators, and someone building a financial model for Dropbox would now likely take a blend of these this into consideration. So EBITDA is by no means the end-all be-all here.

EDIT: And taxation is a different story altogether, as in either the cloud or own-hardware case, Dropbox can write off expenses or depreciation respectively.

Good point. I always wonder how such accounting changes truly reflect the financial performance of the company. On one hand it's a lot of upfront cost to Dropbox with high risk too but all that won't show up completely if this cost is amortizable over the long run.

With HPE Flexible Capacity they only pay for the HW they consume. Cloud-model on premise. https://www.hpe.com/emea_europe/en/services/flexible-capacit...

This could have been the decision driver. It is also why investors increasingly look past ebitda to free cash flow which is harder to game.

Maybe but OpEx is tax deductible. CapEx is not.

Huh? You deduct CapEx cost over the depreciation period (server hardware is usually 3-5 years). Not sure what you mean by "CapEx is not".

CapEx is deductible over the amortization period.

I am pretty sure if they desire they can convert CapEx into OpEx.

Sure, if they sell the storage system to someone and arrange a leaseback.

That's how Microsoft manages its campus real estate. :-)

Nearly every company does that. It's amazing how little many companies actually own. I've worked in offices where everything from building over furniture to even the plants was leased. The company ran with close to zero assets (services business). Pretty sure that this wouldn't make any sense if it wasn't for tax purposes.

and that someone can be their own subsidiary in a jurisdiction with dif. tax treatment

Can be within the same taxing authority. I've facilitated facility transfers and leaseback agreements in the US.

Edit: Yes, you can't seize what isn't owned.

You also can't silently seize what is owned. Which is, generally speaking, the bigger issue.

I would also guess you could also shield assets this way from lawsuits etc