A company is reviewing its operational expenditures related to their data centers. Currently, substantial capital is tied up in server infrastructure, leading to waste during periods of low demand. How can the transition to a cloud service provider benefit this organization in terms of cost efficiency?
The transition would require maintaining a constant level of infrastructure investment, similar to their own data centers.
Transitioning to a service provider will lead to an increase in capital expenditure due to required cloud-specific infrastructure investments.
The transition to the cloud eliminates all expenses as cloud providers offer their services without charge.
The transition would convert significant upfront investment costs into a proportional operating expense model, with payment aligning to usage.
Transitioning to a cloud service provider enables the organization to replace many of their capital expenses, associated with physical infrastructure, with operational expenses based on the actual consumption of services. This pay-as-you-go model provides cost savings by ensuring that expenditures are directly tied to usage levels, reducing the financial impact of idle or underutilized resources. Incorrect answers suggest either an increase in costs that cloud migration doesn't imply or misunderstand the cost-free nature of cloud services, as they are not free but operate on a pay-per-use basis.
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What is the difference between capital expenses (CapEx) and operational expenses (OpEx)?
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How does the cloud's pay-as-you-go model help reduce waste during periods of low demand?
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AWS Cloud Practitioner CLF-C02
Cloud Concepts
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