Exam: Cloud Digital Leader 0 Likes

When an organization adopts cloud technology, how does their total (Digital Leader)

Updated on 05/24/2024

When an organization adopts cloud technology, how does their total cost of ownership (TCO) shift?

A) Away from cost management toward capital expenditure.
B) Away from operational expenditure toward cost management.
C) Away from capital expenditure toward operational expenditure.
D) Away from operational expenditure toward capital expenditure.


Solution

Correct answer: C) Away from capital expenditure toward operational expenditure.
Here's why:

A) Shifting away from cost management toward capital expenditure doesn't accurately reflect the change that occurs with cloud adoption. Cost management remains an important aspect of cloud usage, but the shift is more related to the type of expenses incurred.

B) Shifting away from operational expenditure toward cost management is not a typical shift that occurs with cloud adoption. Operational expenditure remains a significant component of TCO, but the shift is more about how expenses are categorized and managed.

C) Shifting away from capital expenditure toward operational expenditure is a common shift seen with cloud adoption. In traditional on-premises environments, organizations often incur significant capital expenditures upfront for purchasing hardware, software licenses, and infrastructure. In contrast, with cloud technology, organizations pay for services on a subscription or pay-as-you-go basis, leading to a reduction in upfront capital expenditures and a shift toward operational expenditures.

D) Shifting away from operational expenditure toward capital expenditure is not a typical shift that occurs with cloud adoption. Cloud technology typically reduces the need for upfront capital expenditures on hardware and infrastructure, leading to a decrease in capital expenditure and a corresponding increase in operational expenditure.

Category: Digital transformation with Google Cloud

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