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Difficulty: EasyUnderstand concepts of cloud economics

A boutique fitness studio is planning to launch a workout-on-demand streaming service. Instead of purchasing high-end physical video-streaming servers and hosting them in an on-premises facility, the studio decides to run the service on AWS and pay only for the compute hours used each month. Which economic concept of the cloud does this business decision represent?

  1. A shift from capital expenses (CapEx) to operating expenses (OpEx)Answer
  2. B
    A shift from operating expenses (OpEx) to capital expenses (CapEx)
  3. C
    A strategy to maximize upfront capital investments for long-term savings
  4. D
    A requirement to use monolithic deployment structures to decrease licensing costs

Answer

A shift from capital expenses (CapEx) to operating expenses (OpEx)
The correct answer is the shift from capital expenses (CapEx) to operating expenses (OpEx). By choosing to host the service on AWS, the fitness studio avoids purchasing physical servers upfront (CapEx) and instead pays for resource usage dynamically on an ongoing basis (OpEx).

Step-by-Step Solution

1
Identify the traditional costs described in the scenario.
The traditional approach involves buying physical servers and hosting them on-premises, which represents capital expenses (CapEx).
Understanding the baseline physical investment is necessary to identify the economic shift.
2
Analyze the cloud-based payment model chosen by the fitness studio.
The studio pays monthly only for the compute hours actually used, which represents variable operating expenses (OpEx).
This shows the change from fixed upfront costs to variable ongoing costs.
3
Determine the cloud economics concept that corresponds to this transition.
Transitioning from purchasing physical assets to paying for ongoing operational usage is a shift from capital expenses (CapEx) to operating expenses (OpEx).
This directly matches the definition of shifting from CapEx to OpEx in AWS cloud economics.

Key Concept

CapEx vs OpEx shift in cloud computing
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Understand concepts of cloud economics

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