Question 780 of 985

Describe Microsoft 365 pricing and support →mediumMultiple SelectObjective-mapped

Microsoft 365 TCO Comparison Factors

This MS-900 practice question tests your understanding of describe microsoft 365 pricing and support. 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.

Which three factors should a customer consider when estimating the total cost of ownership (TCO) for Microsoft 365 compared to on-premises solutions? (Choose three.)

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

✓

Subscription licensing fees are typically predictable monthly or annual costs.

When estimating TCO for Microsoft 365 versus on-premises solutions, customers should consider that subscription licensing fees are predictable monthly or annual costs (Option A), cloud solutions eliminate hardware procurement and maintenance (Option C), and IT staff time for patching and updates is reduced because Microsoft handles these tasks (Option E). On-premises solutions generally have higher security compliance costs, not lower; migration costs are not always included; and Microsoft 365 does not always offer a lower TCO—it depends on the organization's specific needs.

Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.

Common exam traps

Common exam trap: answer the scenario, not the keyword

Microsoft often tests the misconception that cloud solutions always have a lower TCO or that all migration costs are included, but the correct approach is to evaluate TCO based on specific organizational factors and recognize that Microsoft 365 reduces hardware and maintenance costs while providing predictable licensing.

Detailed technical explanation

How to think about this question

TCO analysis for Microsoft 365 versus on-premises solutions involves comparing direct costs (licensing, hardware, software) and indirect costs (IT staff time, energy, facilities). Under the hood, Microsoft 365 shifts capital expenditures (CapEx) to operational expenditures (OpEx), with predictable subscription fees that include updates, security patches, and compliance features like eDiscovery and data loss prevention. In a real-world scenario, an organization with 500 users might see a 30-40% reduction in TCO over five years by moving to Microsoft 365, but this varies based on existing on-premises investments and the need for specialized compliance controls.

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 startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.

What to study next

Got this wrong? Here's your next step.

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FAQ

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What does this MS-900 question test?

Describe Microsoft 365 pricing and support — This question tests Describe Microsoft 365 pricing and support — Read the scenario before looking for a memorised answer..

What is the correct answer to this question?

The correct answer is: Subscription licensing fees are typically predictable monthly or annual costs. — When estimating TCO for Microsoft 365 versus on-premises solutions, customers should consider that subscription licensing fees are predictable monthly or annual costs (Option A), cloud solutions eliminate hardware procurement and maintenance (Option C), and IT staff time for patching and updates is reduced because Microsoft handles these tasks (Option E). On-premises solutions generally have higher security compliance costs, not lower; migration costs are not always included; and Microsoft 365 does not always offer a lower TCO—it depends on the organization's specific needs.

What should I do if I get this MS-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.

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