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Difficulty: MediumDefine the benefits of the AWS Cloud

A financial services company is launching a new credit scoring application. The company wants to avoid the high upfront costs of purchasing physical servers and networking equipment, preferring to pay for compute resources only as they are consumed during the development and testing phases. Which benefit of the AWS Cloud is directly demonstrated by this business decision?

  1. Trading capital expense for variable expenseAnswer
  2. B
    Converting variable operating expenses into predictable capital expenses
  3. C
    Eliminating all operational expenses by outsourcing infrastructure ownership
  4. D
    Improving scalability by pre-allocating the maximum capacity required for future peak load

Answer

Trading capital expense for variable expense
The correct answer is trading capital expense for variable expense. By using AWS, the company avoids the upfront capital expenditure (CapEx) of buying physical servers and networking hardware. Instead, they pay a variable operating expense (OpEx) that scales with their actual usage during development and testing.

Step-by-Step Solution

1
Analyze the scenario requirements
The company wants to avoid high upfront costs (capital expenditures) for physical servers and pay only for the resources they consume as they go (variable operational expenses).
Identifying the financial shift from upfront hardware investment to pay-as-you-go pricing helps map the scenario to the correct AWS Cloud benefit.
2
Match the scenario to the 6 AWS Cloud benefits
The scenario aligns perfectly with the benefit of trading capital expense for variable expense.
AWS allows businesses to pay for what they use rather than investing heavily in physical data centers and servers before knowing how they will be used.

Key Concept

Trading capital expense for variable expense (CapEx to OpEx)
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Define the benefits of the AWS Cloud

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