💸 Exam Guide: Cloud Practitioner
📘 Task Statement 1.4
🎯 What Is This Task Testing?
This objective checks whether you can explain how cloud changes the cost model and why it can reduce total cost of ownership (TCO). You should be able to discuss:
- fixed vs variable costs
- on-premises cost drivers
- licensing strategies (BYOL vs included)
- rightsizing
- automation benefits (e.g., AWS CloudFormation)
- the value of managed services (e.g., RDS, ECS/EKS, DynamoDB)
1) 🧠 Cloud Economics
Cloud economics is about shifting from “buy and maintain infrastructure” to “consume resources as needed.” The cloud can lower costs by:
- reducing upfront purchases
- reducing wasted capacity
- reducing operational overhead through automation and managed services
- enabling faster delivery (which can also improve business outcomes)
2) 🧾Fixed Costs vs Variable Costs
Fixed costs (on-premises)
Costs that remain relatively constant regardless of usage, such as:
- purchasing servers and networking equipment
- data center leases/build-outs
- long depreciation cycles
Variable costs (cloud)
Costs that scale with usage, such as:
- compute hours consumed
- storage used per GB
- data transfer and request-based pricing (service-dependent)
AWS helps you trade fixed costs (CapEx) for variable costs (OpEx) so you pay more closely in line with actual demand.
3) 🏢 Costs Associated with On-Premises Environments
Recognize and understand that on-premises cost is more than just hardware.
Common on-prem cost categories:
- hardware purchases and refresh cycles
- data center space (rent, facilities)
- power and cooling
- physical security
- networking equipment and maintenance contracts
- IT labor for racking/stacking, patching, monitoring, backups, and incident response
- overprovisioning (buying for peak demand “just in case”)
- downtime risk and disaster recovery duplication (secondary sites)
4) 📄 Licensing Strategies: BYOL vs Included Licenses
BYOL (Bring Your Own License)
You use existing software licenses in the cloud (when terms allow).
Common reasons to choose BYOL:
- you already own licenses and want to extend their value
- it may reduce software costs versus purchasing new licenses
Included licenses
The AWS service/resource pricing includes the license cost.
Common reasons to choose included:
- simpler procurement and management
- predictable billing (license bundled)
- good for short-term needs or when you don’t already own licenses
5) 🧮 Rightsizing
Rightsizing means selecting the most cost-effective resource type and size that meets performance requirements.
What rightsizing looks like in practice:
- reducing oversized instances (CPU/RAM far above actual need)
- choosing the right storage tier/performance level
- scaling resources dynamically rather than keeping everything “always on”
6) 🤖 Benefits of Automation (Provisioning & Configuration)
Automation reduces manual work, improves consistency, and speeds delivery—often lowering operational cost and risk.
Example: AWS CloudFormation
AWS CloudFormation helps you define infrastructure using templates (Infrastructure as Code).
Benefits:
- repeatable, consistent deployments
- faster provisioning (minutes vs manual setup)
- fewer configuration errors (less drift)
- easier auditing and change management
7) 🛠️ Managed AWS Services
Managed services offload infrastructure operations (patching, backups, scaling tasks, high availability setup) to AWS, reducing your operational burden.
Examples and their general category:
- Amazon RDS: managed relational databases (AWS handles backups, patching, maintenance features)
- Amazon DynamoDB: managed NoSQL database (serverless-style scaling, reduced ops)
- Amazon ECS: managed container orchestration (run containers without managing orchestration from scratch)
- Amazon EKS: managed Kubernetes control plane (AWS manages control plane components)
Why managed services matter economically:
- lower labor/operations cost
- faster time-to-market
- improved reliability through standardized managed components
✅ Quick Exam-Style Summary
- Cloud shifts you from fixed costs (CapEx-heavy on-prem) to variable costs (pay for usage).
- On-prem costs include facilities, power/cooling, security, IT labor, maintenance, and overprovisioning.
- Licensing: BYOL = reuse existing licenses; included = simpler, bundled licensing cost.
- Rightsizing reduces waste by matching resources to actual needs.
- Automation (e.g., CloudFormation) improves speed and consistency, reducing errors and ops effort.
- Managed services (RDS, ECS/EKS, DynamoDB) reduce operational overhead and can lower total cost.
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