(Unit 4 of 4) The consumption-based model

Question 1

What are the two types of EXPENSES to consider?

Answer 1

1. Capital expenditure (CapEx)
2. Operational expenditure (OpEx).

Question 2

What are the two types of EXPENSES to consider?

Answer 2

1. Capital expenditure (CapEx)
2. Operational expenditure (OpEx).

Question 3

Describe the FIRST type of expense to consider when comparing IT infrastructure and give 1 example.

Answer 3

CapEx is typically a one-time, up-front expenditure to purchase or secure tangible resources.

Examples: A new building, repaving the parking lot, building a datacenter, or buying a company vehicle are examples of CapEx.

Question 4

Describe the SECOND type of expense to consider when comparing IT infrastructure and give 1 example.

Answer 4

OpEx is spending money on services or products over time.

Examples: Renting a convention center, leasing a company vehicle, or signing up for cloud services are all examples of OpEx.

Question 5

What type of EXPENSE does cloud computing fall under and why?

Answer 5

Cloud computing falls under OpEx because cloud computing operates on a consumption-based model.

Question 6

What are the BENIFITS of a consumption-based model

Answer 6

1. No upfront costs.
2. No need to purchase and manage costly infrastructure that users might not use to its fullest potential.
3. The ability to pay for more resources when they’re needed.
4. The ability to stop paying for resources that are no longer needed.

Question 7

What is a consumption-based pricing model?

Answer 7

You are charged for only what you use.