A city finance director contrasts buying servers owned for five years with paying monthly for variable AWS usage. What cost distinction is being described?
Select an answer to reveal the explanation.
Short Explanation
Owning servers for five years is like buying a bus fleet up front; paying monthly for usage is more like buying rides as ridership changes. That is fixed CapEx-style cost versus variable consumption cost. Cloud does not mean “never think about money” — it changes how spend tracks with demand.
Full Explanation
Cloud economics contrasts fixed costs typical of owned capital assets with variable costs that scale with consumption. Paying for AWS usage monthly aligns spend with actual demand rather than a multi-year hardware purchase. Cloud Practitioner items test that distinction at a foundational level without requiring detailed accounting standards.