Examkin

Question

Difficulty: EasyConsumption-Based Model (CapEx vs OpEx)

An organization is migrating its on-premises workloads to Microsoft Azure. Instead of purchasing physical servers and networking hardware upfront, the organization will pay a monthly bill based on the exact amount of cloud resources consumed. Which expenditure model does this monthly consumption-based billing represent?

  1. Operational Expenditure (OpEx)Answer
  2. B
    Capital Expenditure (CapEx)
  3. C
    Software as a Service (SaaS)
  4. D
    Total Cost of Ownership (TCO)

Answer

Operational Expenditure (OpEx)
The operational expenditure model represents ongoing day-to-day costs where businesses pay for services or resources as they consume them, without any upfront physical hardware purchases.

Step-by-Step Solution

1
Analyze the financial characteristics of the scenario.
The organization is paying monthly based on consumption without purchasing physical assets upfront.
This establishes that the expenses are ongoing operational costs rather than upfront investments in physical property.
2
Differentiate between CapEx and OpEx definitions.
Operational Expenditure (OpEx) aligns with consumption-based billing models, whereas Capital Expenditure (CapEx) aligns with upfront physical infrastructure purchases.
To select the correct cloud expenditure model that avoids upfront costs.

Key Concept

Consumption-Based Model (CapEx vs OpEx)
Estimated Time:45s
Rate this question

Topics

Consumption-Based Model (CapEx vs OpEx)

More questions from this topic