Cloud Digital Leader Why Cloud Technology Can Transform Business Practice Question

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

• ✗

  Multi-cloud

  Why it's wrong here

  Multi-cloud is an architectural strategy that distributes workloads across multiple public cloud providers (e.g., AWS, Azure, Google Cloud) to achieve redundancy, avoid vendor lock-in, or leverage best-of-breed services. While it does outsource infrastructure and thus avoids physical hardware purchases, its primary objective is resilience and flexibility, not CapEx reduction. In fact, managing multiple environments increases operational complexity, egress costs, and security overhead, which can offset financial benefits. Therefore it is not the direct solution to the startup's CapEx reduction goal.

• ✓

  Public cloud

  Why this is correct

  Public cloud computing, exemplified by Google Cloud, provides on-demand compute, storage, and networking via shared, multitenant infrastructure owned and operated by the provider. Customers use a pay-as-you-go model, paying only for metered usage, which converts traditionally capital expenditures (servers, racks, power) into operating expenses. This eliminates upfront hardware procurement, maintenance, and capacity planning, allowing a startup to scale globally with no capital investment. It directly fulfills the requirement to reduce CapEx on hardware.

• ✗

  Hybrid cloud

  Why it's wrong here

  Hybrid cloud combines a private on-premises environment with public cloud services, enabling data and application portability between them. Although this can offload some bursty workloads to the public cloud, the persistent private portion requires the organization to purchase and maintain physical servers, storage, and networking equipment. That unavoidable capital investment means the startup would still incur the CapEx it aims to eliminate. Hence, while offering flexibility, hybrid cloud is not the optimal answer for a pure CapEx reduction strategy.

• ✗

  Private cloud

  Why it's wrong here

  A private cloud delivers dedicated cloud-like services to a single organization, either on-premises or in a hosted environment. On-premises private cloud demands direct capital expenditure for hardware, power, cooling, and data-center space, exactly what the startup wants to avoid. Even a hosted private cloud often carries fixed, reserved pricing that behaves like a capital commitment, rather than a flexible operational expense. Thus, private cloud is fundamentally incompatible with the goal of reducing capital expenditure on hardware.

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