CLF-C02 Question 37
Single answerA startup is considering migrating its on-premises infrastructure to AWS. The company has concerns about reducing upfront investments and scaling costs based on actual usage. Which of the following correctly highlights the key difference between fixed costs and variable costs in the context of AWS cloud services?
- A
Fixed costs in AWS are eliminated because all services are pay-as-you-go.
- B
Variable costs in AWS only apply when using reserved instances for EC2.
- C
AWS replaces high fixed costs associated with on-premises data centers with variable costs that scale based on usage.
- D
Fixed costs in AWS are required to use services such as S3 or DynamoDB.
Show answer and explanation
Correct answer: C
Explanation
The key difference between fixed and variable costs in the context of AWS is that AWS shifts the traditional model of high upfront fixed costs (e.g., purchasing hardware for on-premises setups) to a pay-as-you-go variable cost model. This allows businesses to scale expenses based on actual usage rather than investing heavily in fixed infrastructure costs upfront.
- A. Incorrect.
This is incorrect because while AWS reduces fixed costs significantly, not all services are entirely pay-as-you-go. You may still have some fixed costs, such as long-term reserved instance commitments.
- B. Incorrect.
This is incorrect because variable costs in AWS apply to a wide range of services, not just reserved instances.
- C. Correct.
This is correct because AWS allows businesses to avoid the high fixed costs of on-premises infrastructure and instead adopt a model where costs scale based on actual usage, which aligns with the pay-as-you-go pricing model.
- D. Incorrect.
This is incorrect because AWS services like S3 and DynamoDB do not require fixed costs; they operate on a usage-based pricing model.