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Difficulty: EasyConsumption-Based Model (CapEx vs OpEx)

A logistics company needs to temporarily increase its compute capacity on Microsoft Azure for a three-week promotional event. Under a consumption-based cloud model, how will the company be billed for this temporary increase in capacity?

  1. A
    The company must make an upfront payment to reserve the maximum expected capacity, which is classified as a Capital Expenditure (CapEx).
  2. The company will pay only for the resources they use during the three weeks, without any upfront costs.Answer
  3. C
    The company will be charged a fixed monthly subscription rate for the entire year, regardless of when the resources are active.
  4. D
    The company must commit to a minimum one-year contract for the additional capacity before they can allocate any resources.

Answer

The company will pay only for the resources they use during the three weeks, without any upfront costs.
The correct answer is the option stating that the company will pay only for the resources they use during the three weeks, without any upfront costs. Under a consumption-based cloud model, organizations pay only for the resources they actively consume. This is classified as an Operational Expenditure (OpEx). There are no upfront hardware costs, and when the resources are scaled down or deleted after the three-week event, billing stops immediately.

Step-by-Step Solution

1
Identify the core features of Microsoft Azure's consumption-based billing model.
A consumption-based model requires zero upfront infrastructure costs, has no long-term contractual commitments for on-demand resources, and bills users based strictly on active resource consumption.
This establishes the conceptual criteria needed to identify the correct billing behavior.
2
Apply the consumption-based billing features to the scenario of temporary capacity scaling for three weeks.
The company should only be billed for the compute capacity utilized during the specific three-week promotional window, and billing will stop once those temporary resources are deallocated.
This aligns the general cloud pricing model with the specific logistics business scenario.

Key Concept

Consumption-Based Model (CapEx vs OpEx)
Estimated Time:1m 0s
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Topics

Consumption-Based Model (CapEx vs OpEx)

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