AZ-900 Describe cloud concepts Practice Question
What is the benefit of 'economies of scale' in cloud computing?
⚠ Common exam trap
Candidates often confuse economies of scale with elasticity (scaling to demand) or global reach, but the question specifically asks about the cost benefit derived from the provider's massive purchasing power.
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
✓
Cloud providers pass on lower per-unit costs from massive purchasing power to customers
Economies of scale in cloud computing refers to the cost advantage that cloud providers achieve through massive purchasing power—buying hardware, bandwidth, and power in bulk at discounted rates. They then pass these savings on to customers in the form of lower per-unit costs for compute, storage, and networking services. This is a fundamental economic principle that makes public cloud more cost-effective than running your own data center.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
You can deploy resources in any geographic location worldwide
Why it's wrong here
Deploying resources across multiple geographic regions addresses latency and data-residency requirements, but it does not reflect the unit-cost reductions that arise from a provider's aggregate purchasing. This is a characteristic of geographic flexibility, which is a separate benefit from the cost efficiencies inherent in economies of scale.
- ✓
Cloud providers pass on lower per-unit costs from massive purchasing power to customers
Why this is correct
Cloud providers aggregate demand from millions of customers, enabling them to purchase hardware, bandwidth, and energy at volume discounts. These procurement advantages lower the per-unit cost of computing, which providers pass on to customers in the form of pay-as-you-go pricing. This is the definition of economies of scale in cloud computing.
- ✗
You can scale your resources up or down to match demand
Why it's wrong here
Scaling resources vertically or horizontally to align capacity with fluctuating workload demand is a hallmark of cloud elasticity, not economies of scale. While scaling may indirectly affect cost, it refers to dynamic allocation of resources rather than the structural cost advantages gained from large-scale procurement and operation.
- ✗
You avoid the cost of managing physical infrastructure
Why it's wrong here
Shifting from capital expenditure (CapEx) to operational expenditure (OpEx) by renting cloud infrastructure removes the burden of hardware maintenance and facilities management. This is a financial and operational benefit, but it is distinct from economies of scale, which specifically describes the per-unit cost reduction from a provider's massive scale of operations.
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What is Cloud Computing?
Key term
Public cloud
A public cloud is a computing model where third-party providers deliver IT resources like servers, storage, and applications over the internet to multiple customers on a pay-as-you-go basis.
Key term
Cloud computing
Cloud computing is the on-demand delivery of IT resources over the internet, allowing users to access computing power, storage, and applications without owning physical hardware.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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