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CLF-C02 · Domain 1: Cloud Concepts · 24% of the exam

Task 1.4: Understand concepts of cloud economics.

Fixed versus variable cost, what on-premises really costs, licensing choices, rightsizing, and the savings that automation and scale bring.

Study it

  • Cloud economics: fixed vs variable cost, BYOL, rightsizing

    Lesson coming

Sample questions

Try each one before opening the answer. Every option is explained, with the AWS documentation page that proves it.

Question 1 · choose 1

A team's test environment runs on AWS around the clock, but it is only used during an eight-hour working day, five days a week. The team starts stopping the resources outside working hours. Which cost optimization design principle is the team applying?

  1. AMeasure overall efficiency
  2. BAdopt a consumption model
  3. CAnalyze and attribute expenditure
  4. DStop spending money on undifferentiated heavy lifting
Show the answer and why
  • AMeasure overall efficiency

    Incorrect

    This principle compares the business output of a workload with the cost of delivering it. Stopping idle resources is a different move.

  • BAdopt a consumption model

    Correct

    Pay only for the resources you consume and scale usage with the business need. Stopping environments that are idle outside working hours is the standard example.

  • CAnalyze and attribute expenditure

    Incorrect

    This principle is about identifying costs and assigning them to workloads and owners, not about turning resources off.

  • DStop spending money on undifferentiated heavy lifting

    Incorrect

    This principle is about letting AWS run data centers and managed services for you. The team's change is about when its own resources run.

On-premises hardware costs the same whether it is used or not; in the cloud you stop paying for compute you stop running, which is the consumption model.

Question 2 · choose 1

A company moved its servers to Amazon EC2 with the same sizes they had on premises. Two months later, utilization data shows most instances use less than 10% of their CPU and little of their memory. Which action applies the cost practice of rightsizing?

  1. ABuy three-year Reserved Instances for the current instance sizes
  2. BAdd more instances of the same size behind a load balancer
  3. CMove to smaller instance types that still meet performance needs
  4. DMove the instances to a Region closer to the company's headquarters
Show the answer and why
  • ABuy three-year Reserved Instances for the current instance sizes

    Incorrect

    A Reserved Instance is a commitment to a specific instance configuration that cannot be canceled. Committing to oversized instances locks the waste in.

  • BAdd more instances of the same size behind a load balancer

    Incorrect

    Adding capacity to a workload that already uses a fraction of it raises the cost without any need for it.

  • CMove to smaller instance types that still meet performance needs

    Correct

    Rightsizing uses utilization metrics to resize over-provisioned resources so they still meet performance and capacity requirements at a lower cost.

  • DMove the instances to a Region closer to the company's headquarters

    Incorrect

    Changing Region can change latency for users, but the instances would be just as oversized there.

Lift-and-shift migrations often carry over oversized servers. Rightsizing matches the instance to what the workload actually uses — a tool such as AWS Compute Optimizer recommends sizes from the utilization data.

Question 3 · choose 2

A company moves its applications from its own data center to Amazon EC2 instances. Which costs that it paid for on premises does it no longer carry directly? (Choose TWO.)

  1. ALicenses for the commercial software it brings to AWS under its existing agreements
  2. BPower, network and cooling for the servers
  3. CReplacing server hardware at the end of its life
  4. DStaff time for patching the instances' operating systems
  5. EStaff time for tuning the application's performance
Show the answer and why
  • ALicenses for the commercial software it brings to AWS under its existing agreements

    Incorrect

    With bring your own license (BYOL) the company keeps using, and paying for, the licenses it already owns. Only license-included instances fold the license into the AWS price.

  • BPower, network and cooling for the servers

    Correct

    With Amazon EC2, power, network and cooling are managed by AWS, while on premises the customer pays for them.

  • CReplacing server hardware at the end of its life

    Correct

    The hardware lifecycle and server maintenance move to AWS with Amazon EC2; on premises they are the customer's cost.

  • DStaff time for patching the instances' operating systems

    Incorrect

    On Amazon EC2 the customer still installs and patches the operating system, just as it did on premises.

  • EStaff time for tuning the application's performance

    Incorrect

    Application optimization stays with the customer in every model: on premises, on Amazon EC2 and on managed services.

Moving to EC2 hands the physical layer — power, cooling, hardware, server maintenance — to AWS, and with it the up-front cost of buying and replacing it. The operating system and everything above it stay with the customer.

Question 4 · choose 1

A company is moving an application that uses Microsoft SQL Server to Amazon EC2. It owns no SQL Server licenses and does not want to buy or track them; it wants licensing costs and compliance handled as part of what it pays AWS. Which licensing approach fits?

  1. ALaunch license-included SQL Server instances from AWS
  2. BBring your own license (BYOL)
  3. CUse Dedicated Hosts to see the physical cores of the server
  4. DBuy perpetual licenses first and then import them
Show the answer and why
  • ALaunch license-included SQL Server instances from AWS

    Correct

    With a license-included AMI, licensing costs and compliance are handled for you as part of the instance.

  • BBring your own license (BYOL)

    Incorrect

    BYOL lets a company use licenses it already owns. This company owns none.

  • CUse Dedicated Hosts to see the physical cores of the server

    Incorrect

    Core and socket visibility matters when you bring server-bound licenses of your own. It does not supply a license.

  • DBuy perpetual licenses first and then import them

    Incorrect

    That is the opposite of what the company wants: buying, owning and tracking licenses itself.

License-included means the license is in the price; BYOL means you bring licenses you already own. Which is cheaper depends on what you already have.

Question 5 · choose 1

A company used to buy a large batch of servers every five years, paying for them before it knew how much it would use them. It now runs its workloads on AWS On-Demand Instances. How has its cost model changed?

  1. AIts costs are now fixed, whatever it uses
  2. BIt must now pay for three years of capacity up front
  3. CIt pays AWS once for the hardware it would otherwise have bought
  4. DLarge up-front investment has been replaced by variable expense
Show the answer and why
  • AIts costs are now fixed, whatever it uses

    Incorrect

    The reverse: in the cloud you pay only when you consume computing resources, and only for how much you consume.

  • BIt must now pay for three years of capacity up front

    Incorrect

    On-Demand requires no commitment. Up-front payment is an option for Reserved Instances, not a requirement of using AWS.

  • CIt pays AWS once for the hardware it would otherwise have bought

    Incorrect

    The company never buys the hardware; it pays for what it uses as it uses it.

  • DLarge up-front investment has been replaced by variable expense

    Correct

    Instead of investing heavily in data centers and servers before knowing how they will be used, the company pays only for the computing it consumes.

Capital spent in advance becomes an operating cost that follows usage — the "trade fixed expense for variable expense" advantage.

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