When a company migrates from on-premises to AWS, shifting from CapEx (capital expenditure) to OpEx (operational expenditure) is considered a business benefit. What is the reason that using AWS lets a company convert CapEx into OpEx?
A question asking for the reason in the AWS business model that lets on-premises CapEx (upfront investment) be converted into OpEx (operational expenditure).
It uses a pay-as-you-go model with no upfront investment, paying only for actual usage.
This is correct. On-premises requires a large upfront investment (CapEx) to purchase servers and network equipment, but AWS uses a pay-as-you-go (OpEx) model where you rent only what you need and pay only for what you use, keeping upfront investment to a minimum.
AWS automatically optimizes the resources that you use.
AWS provides resources, but optimization such as choosing instance sizes and stopping unused resources is the customer's responsibility (shared responsibility model).
Moreover, automatic optimization is not the mechanism that converts CapEx into OpEx. The essence of the CapEx-to-OpEx shift is a pay-as-you-go model with no upfront investment, which is unrelated to optimization, so this is incorrect.
AWS servers are shared with other customers, so the individual investment cost is low.
Multi-tenancy, where multiple customers share physical servers, is indeed a feature of AWS, but it is a mechanism for improving resource efficiency, not a matter of accounting classification.
The shift from CapEx (capital expenditure) to OpEx (operational expenditure) comes from pay-as-you-go billing where you pay only for what you use without buying equipment. Sharing is only one factor, not the fundamental reason, so this is incorrect.
AWS prices are low because it receives government subsidies.
AWS is a commercial cloud service that does not rely on subsidies, and it does not lower prices through government support.
Prices are low because of economies of scale and the pay-as-you-go model. The subsidy claim is factually wrong and is not a reason for the CapEx-to-OpEx shift, so this is incorrect.
"CapEx → OpEx" is the biggest business benefit of AWS. Because there is no upfront investment, the barrier to adoption for startups and new businesses is lower. On the exam, "pay-as-you-go" and "no upfront investment" are a typical way of asking about AWS characteristics.