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Which scenario best illustrates the cloud-economics principle of replacing fixed costs with variable costs?
ADecommissioning an idle on-premises data center and running the same workload on usage-billed EC2 instances
BPaying upfront for an annual datacenter cooling contract
CPurchasing perpetual software licenses regardless of usage
DSigning a 10-year capital lease on physical servers and storage
Answer & Solution
Correct answer: A. Decommissioning an idle on-premises data center and running the same workload on usage-billed EC2 instances
Replacing a fixed-cost data center with usage-billed cloud compute converts capex (predictable but inflexible) into opex (variable with demand). The other three options are all examples of fixed-cost commitments.
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