Which statement BEST captures the difference between capital expenditure (CapEx) and operational expenditure (OpEx) in a cloud computing context?
Show answer and explanation
Answer: A
CapEx covers large upfront purchases of physical assets such as servers and networking gear that are paid for long before they generate value, whereas OpEx pays continuously, in line with consumption. Cloud computing converts the first pattern into the second: instead of buying hardware, you pay a running bill for what you use.
Why the other options are wrong
- B. Outright ordering by price is wrong — which one costs more depends entirely on the workload, utilization, and time horizon being compared.
- C. Traditional CapEx is the model tied to long-term hardware ownership; cloud OpEx typically avoids term commitments through pay-as-you-go.
- D. The two categories are stated backwards: on-premises infrastructure is the classic CapEx pattern and pay-as-you-go cloud service bills are OpEx.