L1. What Is Cloud Computing? Benefits and Economics
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Cloud computing is the delivery of computing services over the internet. The AZ-900 exam tests your understanding of the core benefits: high availability, scalability, elasticity, agility, disaster recovery, and the shift from capital expenditure to operational expenditure.
What Is Cloud Computing?
Cloud computing is the delivery of computing services over the internet, including servers, storage, databases, networking, software, analytics, and intelligence. Instead of owning and managing physical data centers, you rent access to these resources from a cloud provider like Microsoft Azure.
The AZ-900 exam uses a precise vocabulary to describe cloud benefits. Every term below has appeared on the exam.
Core Benefits
High Availability refers to the ability of a service to remain accessible even when components fail. Azure expresses this as a percentage SLA: 99.9% availability means less than 8.7 hours of downtime per year, while 99.99% means less than 52 minutes. Scalability is the ability to increase or decrease resources to meet demand. Two types are tested:- *Vertical scaling* (scale up/down): adding more CPU or RAM to an existing resource
- *Horizontal scaling* (scale out/in): adding or removing instances
CapEx vs. OpEx
The AZ-900 exam frequently tests the financial model shift:
| Model | Description |
|---|---|
| CapEx (Capital Expenditure) | Upfront investment in physical infrastructure; value depreciates over time |
| OpEx (Operational Expenditure) | Pay-as-you-go for services consumed; treated as a recurring business expense |
The Consumption-Based Model
Azure uses a consumption-based pricing model: you pay only for the resources you use. Benefits include:
- No upfront infrastructure costs
- No need to purchase over-provisioned capacity
- Ability to pay for additional resources on demand
- Stop paying when resources are no longer needed
- ✓High availability, scalability, elasticity, agility, and disaster recovery are the core cloud benefits tested on AZ-900
- ✓Vertical scaling adds more power to one resource; horizontal scaling adds more instances
- ✓Elasticity is automatic scaling; scalability is the capability
- ✓CapEx = upfront infrastructure spend; OpEx = recurring pay-as-you-go spend
- ✓Cloud computing uses a consumption-based model: you pay only for what you use
1. What does "elasticity" mean in the context of cloud computing?
2. A company replaces its on-premises servers with Azure virtual machines and pays a monthly bill instead of buying hardware. Which financial model does this represent?
Recommended: Pluralsight
This free course covers the theory. Pluralsight adds guided video paths, hands-on Azure labs, and timed practice exams to help you pass AZ-900 with confidence.