AWS Certified Cloud Practitioner (CLF-C02)Cloud ConceptsHard
A company currently runs an on-premises server with the following monthly costs: $500 depreciation, $150 maintenance, and $100 for power and cooling. They are evaluating an equivalent AWS EC2 instance priced at $0.50 per hour, running continuously for a full 30-day month (720 hours). Based on a total cost of ownership comparison, how much would the company save per month by moving to AWS?
- A$360 per month
- B$390 per month
- C$30 per month
- D$750 per month
Show answer & explanationAnswer & explanation
Correct answer: B. $390 per month
On-premises monthly cost = $500 + $150 + $100 = $750. Cloud cost = $0.50 x 720 hours = $360. Savings = $750 - $360 = $390 per month.
Why the other options are wrong
- A. This is the cloud cost itself, not the amount saved.
- C. This does not match either the on-premises or cloud total costs.
- D. This is the full on-premises cost, not the savings.
Total Cost of Ownership (TCO)
A financial estimate comparing the direct and indirect costs of on-premises infrastructure versus cloud alternatives to determine overall savings or expense.
- Includes hardware depreciation, maintenance, and power for on-prem comparisons
- Cloud TCO typically uses hourly or usage-based pricing
- AWS provides a TCO calculator to help with these comparisons
Memory trick: Add up on-prem, subtract cloud, find the savings.