The answer is the private cloud deployment model. This is the correct choice because a private cloud uses dedicated hardware and single-tenant infrastructure, meaning the physical servers are not shared with any other customer. For a financial services company that must strictly control the physical location of servers and process sensitive data, this model ensures exclusive access and full compliance with regulatory requirements. On the Microsoft Azure Fundamentals AZ-900 exam, this scenario tests your ability to match business needs for isolation and control to the correct deployment model. A common trap is confusing a private cloud with a virtual private cloud in a public cloud, but remember: private cloud means the hardware itself is dedicated to one organization, not just logically isolated. For a quick memory tip, think “Private = Physical isolation, Public = Shared hardware.”
AZ-900 Describe cloud concepts Practice Question
This AZ-900 practice question tests your understanding of describe cloud concepts. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. 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 processes sensitive customer data and must strictly control the physical location of the servers. They want to use cloud computing but with dedicated hardware that is not shared with other customers. Which cloud deployment model should they choose?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Private cloud
A private cloud is the correct deployment model because it provides dedicated, single-tenant infrastructure that is not shared with other customers. This ensures that the financial services company can maintain strict physical control over server locations and meet compliance requirements for sensitive customer data, as the hardware is exclusively used by one organization.
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
Public cloud infrastructure is shared across customers, with the provider managing physical locations; control over location is limited.
✓
Private cloud
Why this is correct
Private cloud provides dedicated infrastructure for a single organization, allowing control over server location and isolation from other tenants.
Related concept
Read the scenario before looking for a memorised answer.
✗
Hybrid cloud
Why it's wrong here
Hybrid cloud combines public and private clouds; if the private portion is not dedicated, it may not provide the isolation required.
✗
Community cloud
Why it's wrong here
Community cloud is shared among several organizations with similar needs, not dedicated to a single entity.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse 'private cloud' with 'on-premises only,' but a private cloud can also be hosted by a third-party provider in a dedicated, single-tenant environment, as long as the hardware is not shared with other customers.
Trap categories for this question
Similar concept trap
Community cloud is shared among several organizations with similar needs, not dedicated to a single entity.
Detailed technical explanation
How to think about this question
In a private cloud, the underlying hypervisor (e.g., VMware vSphere or Microsoft Hyper-V) is configured for single-tenant isolation, often using dedicated physical hosts with no resource pooling across tenants. This allows the organization to enforce data residency and sovereignty by deploying the cloud within a specific geographic data center, with hardware that is physically segregated from other customers. Real-world scenarios include financial institutions using Azure Stack or AWS Outposts to run private cloud environments on-premises or in colocation facilities while maintaining full control over server locations.
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
A cloud solutions architect for a retail company is evaluating services for a new workload. The correct answer here reflects best practice for the specific scenario described — not a general cloud recommendation. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Cloud exam questions reward reading the constraint carefully: the same technology can be right or wrong depending on the use case.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this AZ-900 question in full detail.
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: Private cloud — A private cloud is the correct deployment model because it provides dedicated, single-tenant infrastructure that is not shared with other customers. This ensures that the financial services company can maintain strict physical control over server locations and meet compliance requirements for sensitive customer data, as the hardware is exclusively used by one organization.
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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These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A company runs a workload that requires predictable performance and dedicated physical servers. They also need to ensure no other tenant uses the same hardware. Which cloud deployment model meets these requirements?
hard
A.Public
✓ B.Private
C.Hybrid
D.Community
Why B: A private cloud deployment model is correct because it provides dedicated physical servers and ensures that no other tenant shares the same hardware. In a private cloud, the infrastructure is provisioned for exclusive use by a single organization, offering predictable performance and complete isolation from other tenants. This model can be hosted on-premises or by a third-party provider, but the key requirement of dedicated hardware is met.
Last reviewed: Jun 11, 2026
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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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