A marketing firm is considering migrating their data analysis operations to the cloud. The firm is evaluating the cost structures and wants to understand how cloud services might offer economic advantages over their current on-premises solution. Which of the following statements best describes the cost difference they should consider?
Migrating to the cloud will have no significant impact on their cost structure, as fixed and variable costs are similar in both on-premises and cloud environments.
The transition to cloud services will increase their fixed costs due to the requirement of purchasing the cloud infrastructure outright, but it will lower their ongoing operational expenses.
The firm will incur higher variable costs with cloud services since they will be leasing hardware rather than owning it, leading to increased long-term expenses.
By using cloud services, the firm can reduce their high fixed costs associated with maintaining on-premises hardware and instead pay for computing resources as they use them, offering better cost flexibility and scaling.
The correct answer highlights that with cloud services, the firm can shift from a high fixed cost model (CAPEX) where they invest in hardware and infrastructure, to a variable cost model (OPEX) where they pay only for the services they consume. Fixed costs relate to expenses that do not change with the level of goods or services produced within a certain time frame, such as data centers, physical servers, and maintenance staff. Variable costs with cloud services allow for savings as these costs scale with usage and can be dialed up or down based on demand, such as computing power or storage used.
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AWS Cloud Practitioner CLF-C02
Cloud Concepts
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