A company is planning to move its data center to the cloud. The Chief Financial Officer (CFO) is evaluating the costs involved with the current on-premises setup versus the costs after migration. Which type of cost would most likely decrease as a result of migrating to the cloud?
Variable costs, like data transfer fees that scale with usage.
Personnel costs for employees who develop the applications.
Fixed costs, such as the cost of owning and maintaining data center hardware.
Operational costs relating to software licensing for on-premises databases.
After migrating to the cloud, an organization shifts from a capital expenditure (CapEx) model with high fixed costs to an operational expenditure (OpEx) model with variable costs. Fixed costs, such as the expenses for physical hardware and data center facilities, decrease or are eliminated because the cloud provider absorbs these responsibilities. In contrast, variable costs will now account for a larger portion of IT spending. Personnel costs for developers are generally not directly reduced by a cloud migration.
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AWS Cloud Practitioner CLF-C02
Cloud Concepts
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