One of the primary reasons for using the Cloud is that the cost should be significantly lower when compared to traditional computing. In this section we'll introduce the various Cloud payment model options available. In a non Cloud environment businesses typically incur a wide variety of on-premise IT infrastructure costs, including physical server hardware, associated storage, networking and onsite and offsite backup and archive. Each of these items is a real fixed cost. As their business grows they will need to increase their capacity by purchasing more of these assets.
There is also the cost relating to ensuring business continuity and disaster recovery, such as perhaps a second standby site, physical security and monitoring, and software licenses for all devices and servers. Finally often the largest cost within the IT budget will be the staff costs. Some of these costs may fluctuate, such as licensing and staff costs, though most of these are fixed and discrete cost items that require planning and budget allocation. In business there are two types of funding models available capital expenditure, which is often referred to as CapEx, and operational expenditure, which is known as OpEx.
We can see from the definition that a CapEx is when money is spent on fixed assets. This can include land, buildings, and equipment. Typically a business will by IT equipment such as servers, the racks, and storage. This cost immediately leaves the bank account when the item is purchased, but the cost can be shown as an amortization or depreciation charge in the accounts of the business for several years. OpEx is the money spent on operational costs, such as wages, rent, utilities, and repairs.
Most businesses like to predict and manage their monthly OpEx cost closely so they can create accurate forecasts and budgets. If you lease an asset such as a new server this is paid by a monthly lease payment which is accounted for as OpEx. A new and very popular model of financing is called Pay-as-You-Go. Everything is becoming subscription based. You're probably familiar with the Pay-as-You-Go billing model from your cell phone of TV entertainment provider. You pay for the service and for what you consume. Pay-as-You-Go cloud computing is the same principle as we spin up more processing resources and consume more data bandwidth our monthly cost increases.
There is no commitment and you only pay for the usage of the Cloud each month. Pay-as-You-Go is then an OpEx type of expenditure. We already know that accountants love OpEx since it is predictable. In the next movie we will cover how the Cloud is able to expand capacity and scale to our needs and provide regeneracy and great availability across the globe.
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Gain a new or enhanced understanding of cloud principles, service offerings, delivery mechanisms, and security requirements. This course focuses on the objectives for the first two domains of the Microsoft Cloud Fundamentals exam (98-369: Understand the Cloud and Enable Microsoft Cloud Services). IT professionals and those interested in pursuing certification can use this course as an exam preparation resource.
Cloud principles and security mechanisms
Cloud security requirements and policies
Cloud updates and availability
Types of cloud services
Signing up for cloud services
Configuring cloud services
Configuring Microsoft Intune