NovaKitchens, a food delivery startup, manages order dispatching infrastructure that experiences predictable demand spikes during lunch and dinner, but remains virtually idle between 10 PM and 11 AM. The startup is planning to migrate these systems from an on-premises data center to AWS. The finance department needs to evaluate how this transition affects their cost structure.
Which TWO statements correctly describe the economic or financial benefits of this migration for NovaKitchens?
- By shifting from a Capital Expense (CapEx) model to an Operating Expense (OpEx) model, NovaKitchens avoids large upfront investments in physical server infrastructure.Answer
- Using cloud elasticity allows NovaKitchens to scale down compute capacity during idle hours, minimizing costs associated with unused resources.Answer
- CNovaKitchens can completely eliminate variable operating expenses (OpEx) by prepaying for all EC2 instances using standard On-Demand pricing.
- DNovaKitchens must provision for peak capacity at all times to satisfy the requirements of the AWS Pay-as-you-go model.
- EA simple lift-and-shift migration (rehosting) will automatically refactor their application code to serverless, eliminating all licensing and operational maintenance costs.
Answer
The correct options are shifting from a Capital Expense (CapEx) model to an Operating Expense (OpEx) model, and using cloud elasticity to scale down compute capacity during idle hours.
Shifting to the cloud enables organizations to trade capital expenses (CapEx) for operating expenses (OpEx), removing the requirement for upfront server investments. Additionally, using cloud elasticity helps dynamically align resource provisioning with demand, saving money by scaling down during off-peak hours.
Step-by-Step Solution
Key Concept
Cloud economics relies on converting capital expenditures into operating expenses and utilizing elasticity to eliminate idle capacity costs.