This chapter covers Total Cost of Ownership (TCO). AZ-900 tests under 1.4.
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A simple way to picture Total Cost of Ownership (TCO) in Cloud
Buying a cheap car might have high maintenance costs. Total cost includes purchase and lifetime operating costs. TCO does the same for infrastructure.
TCO accounts for all costs: hardware, software, labor, power, cooling. Cloud TCO typically lower than on-premises for most organizations, but varies by workload.
Identify all costs
Hardware, software, labor, power, cooling are included.
Compare on-premises vs cloud
Total costs are compared.
Evaluate benefits
Non-cost factors (agility, scalability) are considered.
On-premises: $200k hardware + $50k annual labor + $30k annual power = $280k year-1, $80k subsequent years. Cloud: $100k annual = likely lower TCO long-term.
Objective 1.4 expects understanding of TCO as a cost comparison tool.
Includes all costs: hardware, labor, power, etc.
Cloud TCO typically lower long-term.
Supports business case for cloud adoption.
It accounts for all infrastructure costs — hardware, labor, power, cooling — comparing on-premises vs cloud approaches for the true cost comparison.
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