- A
Public cloud
Why wrong: A public cloud model would move all workloads, including sensitive data, to the cloud provider's infrastructure. This would violate the regulatory requirement that prohibits storing or processing customer data outside the company's physical premises.
- B
Private cloud
Why wrong: A private cloud model keeps everything on-premises, which satisfies the data residency requirement but does not allow the company to take advantage of cloud computing for its compute-intensive workloads. The goal is to use public cloud for some workloads, so private cloud alone is insufficient.
- C
Hybrid cloud
A hybrid cloud model combines a private cloud (on-premises) with a public cloud. The company can keep sensitive customer data on-premises while running compute-intensive risk analysis workloads in the public cloud. This meets regulatory requirements and allows the company to benefit from cloud scalability and cost-efficiency.
- D
Community cloud
Why wrong: A community cloud is designed for multiple organizations with shared concerns (e.g., compliance, security) and is not specific to a single organization's regulatory data residency needs. It does not inherently allow for keeping data on-premises while using public cloud for other workloads.
AZ-900 Describe cloud concepts Practice Question
This AZ-900 practice question tests your understanding of describe cloud concepts. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A financial services company has an on-premises data center that houses sensitive customer data. Regulatory requirements mandate that this data cannot be stored or processed outside the company's physical premises. However, the company wants to take advantage of cloud computing for compute-intensive risk analysis workloads that process anonymized subsets of the data. The company also needs to maintain a consistent management and security posture across both environments. Which cloud deployment model should the company adopt?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Hybrid cloud
Hybrid cloud (C) is correct because it allows the company to keep sensitive customer data on-premises to meet regulatory requirements while leveraging the public cloud for compute-intensive risk analysis on anonymized subsets. This model also enables consistent management and security policies across both environments through unified tools like Azure Arc or AWS Outposts.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Public cloud
Why it's wrong here
A public cloud model would move all workloads, including sensitive data, to the cloud provider's infrastructure. This would violate the regulatory requirement that prohibits storing or processing customer data outside the company's physical premises.
- ✗
Private cloud
Why it's wrong here
A private cloud model keeps everything on-premises, which satisfies the data residency requirement but does not allow the company to take advantage of cloud computing for its compute-intensive workloads. The goal is to use public cloud for some workloads, so private cloud alone is insufficient.
- ✓
Hybrid cloud
Why this is correct
A hybrid cloud model combines a private cloud (on-premises) with a public cloud. The company can keep sensitive customer data on-premises while running compute-intensive risk analysis workloads in the public cloud. This meets regulatory requirements and allows the company to benefit from cloud scalability and cost-efficiency.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Community cloud
Why it's wrong here
A community cloud is designed for multiple organizations with shared concerns (e.g., compliance, security) and is not specific to a single organization's regulatory data residency needs. It does not inherently allow for keeping data on-premises while using public cloud for other workloads.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates may choose private cloud (B) thinking it fully satisfies data residency, but they overlook the need for elastic compute for burst workloads, which hybrid cloud uniquely provides by combining on-premises control with public cloud scalability.
Detailed technical explanation
How to think about this question
Hybrid cloud architectures often use VPNs or dedicated connections like Azure ExpressRoute or AWS Direct Connect to securely extend on-premises networks to the cloud. For consistent management, tools like Azure Arc or AWS Systems Manager provide a single pane of glass for policy enforcement, monitoring, and identity management across both environments, enabling role-based access control (RBAC) and Azure Policy or AWS Config rules to apply uniformly.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
An e-commerce site experiences heavy traffic on Black Friday and near-zero traffic during off-peak weeks. Rather than provisioning permanent large VMs, the team uses auto-scaling groups that add capacity automatically under load and reduce it overnight. Questions like this test whether you understand elasticity, availability zones, and cloud compute scaling patterns.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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FAQ
Questions learners often ask
What does this AZ-900 question test?
Describe cloud concepts — This question tests Describe cloud concepts — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Hybrid cloud — Hybrid cloud (C) is correct because it allows the company to keep sensitive customer data on-premises to meet regulatory requirements while leveraging the public cloud for compute-intensive risk analysis on anonymized subsets. This model also enables consistent management and security policies across both environments through unified tools like Azure Arc or AWS Outposts.
What should I do if I get this AZ-900 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
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Last reviewed: Jun 11, 2026
This AZ-900 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the AZ-900 exam.
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