CLOUD-DIGITAL-LEADER · Question #231
Why should an organization consider the total cost of ownership (TCO) when moving from on- premises to the cloud?
The correct answer is C. To evaluate return on investment. Total Cost of Ownership (TCO) is a comprehensive financial analysis that captures all direct and indirect costs of a system over its lifetime-including hardware, software, labor, maintenance, and operational costs. When migrating to the cloud, organizations must compare…
Question
Why should an organization consider the total cost of ownership (TCO) when moving from on- premises to the cloud?
Options
- ATo evaluate error budget
- BTo understand service level availability
- CTo evaluate return on investment
- DTo calculate required compute power
How the community answered
(42 responses)- B2% (1)
- C93% (39)
- D5% (2)
Explanation
Total Cost of Ownership (TCO) is a comprehensive financial analysis that captures all direct and indirect costs of a system over its lifetime-including hardware, software, labor, maintenance, and operational costs. When migrating to the cloud, organizations must compare on-premises TCO against cloud TCO to determine whether the move is financially justified. This comparison is the foundation of evaluating Return on Investment (ROI): if the cloud TCO is lower or delivers more value per dollar, the ROI is positive. The other options are incorrect because error budgets (A) relate to reliability/SRE practices, service level availability (B) is a reliability metric unrelated to cost analysis, and compute capacity planning (D) is a technical sizing exercise, not a financial decision framework.
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