CapEx vs OpEx in Cloud Computing
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Questions and Answers

A company decides to migrate its data storage and processing needs to a cloud service provider, eliminating the need to purchase and maintain its own hardware. How would this shift in infrastructure spending be categorized?

  • A shift from CapEx to OpEx, as the company transitions from owning assets to paying for services. (correct)
  • Remaining entirely within OpEx, as data processing is always an operational expense.
  • A shift from OpEx to CapEx, as operational costs increase with cloud services.
  • Remaining entirely within CapEx, as data storage is a tangible asset.

A startup anticipates rapid growth and chooses a cloud-based infrastructure over building its own data center. Which advantage of the cloud model is most relevant to this decision?

  • The ability to precisely forecast and match resource allocation to actual demand, minimizing waste.
  • The avoidance of large upfront investments in hardware and infrastructure, which can strain initial capital. (correct)
  • The guarantee of lower long-term costs compared to owning and maintaining a private data center.
  • The elimination of all security concerns, as the cloud provider assumes full responsibility.

An e-commerce company experiences a massive surge in website traffic during a flash sale event. How does a cloud-based infrastructure help manage this situation compared to a traditional data center?

  • By caching all website content on local user devices, eliminating server-side processing demands.
  • By instantly optimizing the website's code to reduce server load, requiring no additional resources.
  • By allowing for rapid allocation of additional resources to handle the increased load, with costs tied to actual usage. (correct)
  • By automatically negotiating lower bandwidth costs with internet service providers.

A financial institution is considering migrating to the cloud, but is concerned about regulatory compliance and data sovereignty. Which cloud deployment model would best allow them to maintain control and address these concerns?

<p>A private cloud, building and maintaining a dedicated cloud environment within their own data center or with a trusted provider. (C)</p> Signup and view all the answers

A large enterprise with existing on-premises infrastructure decides to adopt a hybrid cloud strategy. Which of the following is NOT a typical driver for this decision?

<p>Reducing overall IT complexity by completely migrating all applications and data to the public cloud. (C)</p> Signup and view all the answers

A tech company uses cloud-based services. What best illustrates the consumption-based pricing model?

<p>Subscribing to a cloud storage service where costs are determined by the amount of data stored and accessed each month. (B)</p> Signup and view all the answers

A global corporation aims to optimize its IT spending and enhance agility. It opts for a multi-cloud strategy, distributing workloads across different providers. Evaluate which consideration is LEAST pertinent.

<p>Maximizing vendor lock-in with each provider to leverage volume discounts and long-term contracts. (D)</p> Signup and view all the answers

An organization is evaluating the total cost of ownership (TCO) for migrating a mission-critical application to the cloud. Which of the following factors, often overlooked, would most significantly impact the long-term TCO calculation?

<p>The ongoing costs associated with refactoring and re-architecting the application to fully leverage cloud-native services and optimize performance. (D)</p> Signup and view all the answers

Flashcards

CapEx (Capital Expenditure)

One-time, up-front expenditure on tangible resources.

OpEx (Operational Expenditure)

Spending money on services or products over time.

OpEx (in Cloud Computing)

Cloud computing expenses fall under this category, due to its consumption-based model.

Cloud Computing

Delivery of computing services over the internet using a pay-as-you-go model.

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Consumption-Based Model

Model where you pay only for the IT resources you consume.

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Resource Over/Under-provisioning

Estimating future resource needs incorrectly, leading to wasted money or decreased performance.

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Scalability in the Cloud

Quickly add or remove virtual machines (VMs) as needed based on demand.

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Cloud Computing Analogy

Renting compute power and storage from someone else's datacenter.

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Study Notes

  • IT infrastructure models have two types of expenses: Capital expenditure (CapEx) and operational expenditure (OpEx).
  • CapEx involves one-time, upfront expenditures for tangible resources, like buildings or vehicles.
  • OpEx involves spending money on services or products over time, such as renting or leasing.
  • Cloud computing falls under OpEx due to its consumption-based model.
  • In cloud computing, payment is only for the IT resources consumed.
  • Not using any IT resources in a given month means no payment is required.
  • A traditional datacenter requires estimating future resource needs, which can lead to overspending or under-provisioning.
  • Under-provisioning can cause decreased performance and take a long time to fix.
  • In a cloud-based model, adjustments to virtual machines can be made as needed, and payment is only for what is used.
  • Cloud computing is the delivery of computing services over the internet using a pay-as-you-go pricing model.
  • Cloud resources can be treated like resources in your own datacenter, however you give them back when you're done using them.
  • The cloud provider maintains the underlying infrastructure.
  • The cloud enables you to solve tough business challenges.

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Description

Cloud computing utilizes an operational expenditure (OpEx) model, charging users for IT resources consumed, unlike the capital expenditure (CapEx) model of traditional datacenters. This approach allows for flexibility and cost-efficiency. Users can adjust virtual machine resources as needed and only pay for actual usage.

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