6. Economics

Question 1

What economies of scale ?

Answer 1

• Ability to do things more efficiently or at a lower-cost per unit when operating at a larger scale.
• Cloud providers are large businesses leveraging the benefits of economies of scale.

Question 2

What is Capital Expenditure (CapEx) ?

Answer 2

Spending of money on physical infrastructure up front and then deducting that expense from your tax bill over time.
E.g. server, storage, network, backup & archive, organization continuity and disaster recovery, datacenter infrastructure, technical personal.

Question 3

What are the benefit Capital Expenditure (CapEx) ?

Answer 3

• Plan your expenses at the start of a project or budget period.
• Your costs are fixed, meaning you know exactly how much is being spent.
• 💡 Appealing when you need to predict the expenses before a project starts due to a limited budget.

Question 4

What is Operational Expenditure (OpEx) ?

Answer 4

• Spending money on services or products now and being billed for them now. There’s no upfront cost: You pay for a service or product as you use it

Question 5

What are the benefit Operational Expenditure (OpEx) ?

Answer 5

• Companies wanting to try a new product or service don’t need to invest in equipment
• OpEx is particularly appealing if the demand fluctuates or is unknown

Question 6

Difference CapEx vs OpEx:

Answer 6

Before: up-front cost in hardware and infrastructure to start or grow a business (CapEx)
With cloud: Use services without significant upfront costs or equipment setup time (OpEx)

Question 7

Is CapEx possible in cloud ?

Answer 7

yes with Azure Reserved VM Instances

Question 8

What are the factors affecting cost ?

Answer 8

• Resource type
• Services
• Location (varies based on popularity)
• Bandwidth

Question 9

Name the different tool that help you with billing:

Answer 9

• Azure pricing calculator: estimate costs without deploying and running those services
• Azure Advisor: Analyzes your deployed services and gives personalized recommendations
• Azure Cost Management: tool that for greater insights into costs
• Azure TCO calculator: Compares on-prem vs cloud costs

Question 10

Give some best practices to optimize infrastructure cost

Answer 10

• Use spending limits
• Use reserved instances
• Choose low-cost locations and regions
• Research available cost-saving offers
• Right-size underutilized virtual machines
• Deallocate virtual machines in off hours
• Migrate to PaaS or SaaS services

Question 11

Give some best practices to optimize licensing cost

Answer 11

• Linux vs. Windows cost differe
• Azure Hybrid Benefit
• Use Dev/Test subscription offers
• Bring your own SQL Server license
• Use SQL Server Developer Edition
  -Use constrained instance sizes for database workloads