Capital Expenditure (CapEx) refers to costs for buying something in advance that will provide long-term benefits, such as a physical server. Operation Expenditure (OpEx) refers to costs for running and maintaining an asset. In your on-prem data center, there will be lots of CapEx as you need to buy all the hardware for it upfront before it will provide any value for the business. There will also be OpEx costs for maintaining the assets in your on-premise data center.
When having your applications deployed to the cloud the CapEx costs will be removed. There is no investment in assets as you’re only paying for the time you use the services offered by the cloud, not the physical resource itself. This is referred to as a consumption-based model, another term for this is Pay-As-You-Go. A great benefit of this is that your business can grow linearly.