A medium-sized enterprise with cyclical business trends is assessing the financial implications of moving its sales application from a dedicated on-premises environment to AWS. Outlining the quarterly cost behavior after the migration, which statement best describes the expected change?
Fixed costs will increase due to the necessity of higher upfront investment in cloud services, while variable costs will remain marginal depending on the data transfer rates.
While quarterly costs will become more predictable, they will be composed of both fixed subscription fees for cloud services and variable costs from unforeseen spikes in application use.
The quarterly costs would oscillate in direct proportion to the enterprise's application usage, exhibiting a variable cost structure aligned with their cyclical business trends.
Costs will become predominantly fixed as the cloud provider requires a constant fee for the maintained infrastructure, independent of the enterprise's sales cycle or application usage.
Migrating to AWS will shift the enterprise's costs from a largely fixed model to a more variable model. In an on-premises environment, costs are predominantly fixed because the investments in hardware, space, and maintenance do not fluctuate in line with business activity or demand. However, AWS pricing is based on actual usage of services, scaling with the demand. This scale-to-fit approach allows businesses, especially those with cyclical trends, to reduce costs when demand is low and efficiently scale up when demand rises.
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AWS Cloud Practitioner CLF-C02
Cloud Concepts
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