CLOUD-DIGITAL-LEADER · Question #216
When an organization adopts cloud technology, how does their total cost of ownership (TCO) shift?
The correct answer is C. Away from capital expenditure toward operational expenditure. When organizations move to the cloud, their spending model fundamentally changes from Capital Expenditure (CapEx) to Operational Expenditure (OpEx). CapEx involves large upfront investments in physical hardware, data centers, and infrastructure that depreciate over time. Cloud…
Question
When an organization adopts cloud technology, how does their total cost of ownership (TCO) shift?
Options
- AAway from cost management toward capital expenditure
- BAway from operational expenditure toward cost management
- CAway from capital expenditure toward operational expenditure
- DAway from operational expenditure toward capital expenditure
How the community answered
(32 responses)- B3% (1)
- C94% (30)
- D3% (1)
Explanation
When organizations move to the cloud, their spending model fundamentally changes from Capital Expenditure (CapEx) to Operational Expenditure (OpEx). CapEx involves large upfront investments in physical hardware, data centers, and infrastructure that depreciate over time. Cloud adoption eliminates most of that - instead, organizations pay ongoing, usage-based fees (OpEx) for the resources they consume. This shifts TCO from buying assets to renting services. Option A is backwards - cloud moves away from CapEx, not toward it. Option B is incorrect - it implies moving away from OpEx, which is the opposite of what happens. Option D describes the opposite direction of the actual shift.
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