AWS Certified Cloud Practitioner (CLF-C02)Cloud ConceptsEasy
A company is considering migrating its on-premises infrastructure to AWS. They currently have a significant upfront investment in hardware and data center facilities. They are interested in a pricing model that allows them to pay only for the compute, storage, and other resources they actually use, without large initial capital expenditures. Which AWS cloud economics concept best describes this benefit?
- ATotal Cost of Ownership (TCO)
- BCapEx to OpEx
- CEconomies of Scale
- DReserved Instances
Show answer & explanationAnswer & explanation
Correct answer: B. CapEx to OpEx
Moving from Capital Expenditure (CapEx) to Operational Expenditure (OpEx) is a core AWS cloud economics benefit, allowing companies to pay for services as they consume them, avoiding large upfront hardware investments.
Why the other options are wrong
- A. TCO is a calculation of all direct and indirect costs, not a pricing model itself.
- C. Economies of Scale refer to AWS's ability to offer lower prices due to its large customer base.
- D. Reserved Instances are a pricing option for cost savings, but not the fundamental shift from CapEx to OpEx.
CapEx to OpEx
The transition from incurring large upfront capital expenditures (CapEx) for IT infrastructure to paying for IT resources as operating expenses (OpEx) on a consumption basis.
- Eliminates the need for large upfront investments in hardware.
- Converts fixed costs into variable costs.
- Frees up capital for business innovation.
Memory trick: Cloud: Spend smart, grow fast.