A company is evaluating its expenses associated with its on-premises data center as compared to moving its operations to the AWS Cloud. The company pays a consistent monthly fee for the physical space of the data center, regardless of the computing resources used. In the context of cloud economics, how is this type of expense classified when considering a migration to a cloud-based infrastructure?
Fixed costs are expenses that do not change with the amount of goods or services a company produces in the short term. The monthly fee for physical space represents a fixed cost since it remains constant regardless of the computing resources utilized. When moving to the AWS Cloud, the company may be able to convert some fixed costs into variable costs that align more closely with their usage, potentially resulting in cost savings.
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What is the difference between fixed and variable costs in cloud economics?
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AWS Cloud Practitioner CLF-C02
Cloud Concepts
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