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Difficulty: EasyUnderstand concepts of cloud economics

A fitness center franchise wants to migrate its membership management system from on-premises servers to the AWS Cloud to optimize costs. Which two statements describe the economic advantages of this migration?

  1. The franchise can swap fixed capital investments for variable operational costs.Answer
  2. The franchise can scale down resources during low-activity periods to pay only for active utilization.Answer
  3. C
    The franchise will eliminate operating expenses by prepaying for all physical data center facilities.
  4. D
    The franchise must provision enough database capacity to handle its highest possible yearly peak at all times.
  5. E
    The franchise can retrieve and utilize AWS compliance reports to automatically eliminate software licensing fees.

Answer

The correct options are the statements explaining that the franchise can swap fixed capital investments for variable operational costs and that it can scale down resources during low-activity periods to pay only for active utilization.
Migrating to the AWS Cloud allows organizations to replace upfront capital expenses with variable operating expenses. Additionally, because of cloud elasticity, organizations can scale resources down during off-peak hours, ensuring they only pay for the capacity they actually use.

Step-by-Step Solution

1
Analyze the financial transition of cloud migration.
Identify that cloud computing replaces capital expenditure (buying hardware upfront) with operating expenditure (paying for resources dynamically).
This helps evaluate the first economic advantage regarding fixed capital investments versus variable operational costs.
2
Evaluate the impact of elasticity on cost efficiency.
Identify that scaling resources up or down dynamically based on user demand reduces waste and minimizes costs during off-peak times.
This helps evaluate the second economic advantage regarding variable resource utilization.

Key Concept

Cloud Economics: CapEx vs OpEx and Elasticity
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Understand concepts of cloud economics

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