A company is considering migrating their data processing infrastructure to the AWS Cloud to capitalize on cost savings. They currently operate their own data centers with substantial fixed costs and limited flexibility in capacity. How does AWS help this company achieve cost savings through economies of scale?
By mandating long-term contracts that guarantee reduced rates over a specified time period, ensuring predictable costs.
By replacing their current fixed expenses with variable costs based on actual usage, eliminating the need for overprovisioning resources.
By providing discounted hardware for on-premises installation, reducing the capital expenditure for maintaining data centers.
By reducing the number of services and features available to decrease complexity and management overhead.
AWS offers cost savings through economies of scale by allowing customers to pay only for the resources they consume. Rather than investing heavily in physical infrastructure and its maintenance (which often includes overprovisioning to meet peak demands), AWS's massive scale allows for resource pooling and sharing among a vast customer base. This results in lower operational costs due to the shared infrastructure, and customers benefit from the reduced costs due to AWS's ability to purchase and operate resources more efficiently than individual companies can typically achieve on their own. By leveraging AWS's optimized and scalable infrastructure, the company can avoid up-front capital expenditure and instead utilize a variable cost structure that adjusts with their actual usage, leading to significant cost savings.
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AWS Cloud Practitioner CLF-C02
Cloud Concepts
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