Compared with owning and maintaining servers on-premises, which financial characteristic of public cloud services most helps organizations reduce up-front investment during a digital transformation initiative?
Hardware depreciation cycles are extended, allowing capital equipment to be retained longer.
All ongoing operational expenses associated with IT systems are eliminated.
Customers pay a fixed monthly subscription that does not vary with actual resource usage.
Costs are treated as pay-as-you-go operational expenses rather than large capital expenditures.
Public cloud resources are purchased on an as-needed, pay-as-you-go basis. Because the provider owns the hardware, customers avoid large capital purchases and instead record usage as operational expenses. Longer depreciation cycles do not eliminate the initial capital outlay, a fixed monthly fee ignores variable demand, and operational expenses such as administration and networking are still required, so those statements do not capture the key financial difference.
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What is the pay-as-you-go model in cloud computing?
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