[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"cheat-sheet---en":3,"domain-info---en":3,"topic-info----en":3,"lesson-cloud-computing-fundamentals-cloud-concepts-and-economics-cloud-economics-total-cost-of-ownership-en":4,"prev-cloud-computing-fundamentals-cloud-concepts-and-economics-cloud-economics-total-cost-of-ownership-en":280,"next-cloud-computing-fundamentals-cloud-concepts-and-economics-cloud-economics-total-cost-of-ownership-en":511},null,{"locked":5,"reason":3,"meta":6,"item":16},false,{"title":7,"description":8,"isFree":5,"estimatedMinutes":9,"difficulty":10,"learningObjectives":11},"Total Cost of Ownership","Why the number on a cloud invoice, or a hardware quote, is never the full cost of running a workload, and how to compare cloud and on-premises costs honestly over several years.",18,"intermediate",[12,13,14,15],"Define total cost of ownership (TCO) and distinguish it from the price on a single invoice or hardware quote","Identify the direct and indirect cost categories a full TCO comparison has to include on both the cloud and on-premises sides","Explain what FinOps is and why it exists as an ongoing practice rather than a one-time calculation","Evaluate a scenario to judge whether a workload's TCO favors cloud or on-premises infrastructure",{"id":17,"title":7,"body":18,"description":8,"difficulty":10,"estimatedMinutes":9,"extension":204,"infographics":205,"isFree":5,"learningObjectives":214,"meta":215,"navigation":216,"path":217,"quiz":218,"seo":277,"stem":278,"__hash__":279},"courses/courses/cloud-computing-fundamentals/en/domains/01-cloud-concepts-and-economics/03-cloud-economics/03-total-cost-of-ownership.md",{"type":19,"value":20,"toc":192},"minimark",[21,26,30,33,37,40,44,47,50,54,57,60,64,67,161,164,167,172,176,179,182,186,189],[22,23,25],"h2",{"id":24},"the-invoice-that-only-tells-you-the-price-of-the-meter","The invoice that only tells you the price of the meter",[27,28,29],"p",{},"In 2022, 37signals, the company behind Basecamp and the email service Hey, decided its AWS and Google Cloud bills had become one of the most expensive parts of running the business, and began moving that infrastructure back into its own data centers. By 2024, its annual cloud bill had dropped from $3.2 million to $1.3 million, a reported $2 million a year in savings, after an upfront hardware purchase of around $700,000, with the company projecting more than $10 million saved over 5 years. That is a real, well-documented case of owning hardware costing less than renting the equivalent capacity, for that company's specific, steady, predictable workload.",[27,31,32],{},"It is also, on its own, an incomplete comparison, and understanding why is exactly what total cost of ownership is for.",[22,34,36],{"id":35},"what-tco-actually-means","What TCO actually means",[27,38,39],{},"Total cost of ownership is the complete cost of acquiring, running, and maintaining a system over a defined period, usually 3 to 5 years, not just the price of any single line item. A cloud invoice shows the meter: compute, storage, and data transfer, billed for the month just used. A hardware quote shows the sticker price of the box. Neither one is TCO. TCO is what you get once you add everything that surrounds that visible number on both sides of the comparison.",[22,41,43],{"id":42},"direct-costs-versus-the-costs-nobody-puts-on-the-invoice","Direct costs versus the costs nobody puts on the invoice",[27,45,46],{},"The direct, metered costs are the ones a cloud bill already shows: compute, storage, and data transfer. Data transfer deserves a specific note, because it is not symmetric. AWS, like most providers, does not charge to move data into its cloud, but does charge, on a tiered basis, to move data out, called egress. A workload that reads a small amount of data but exports large amounts of it regularly can carry a much bigger data-transfer bill than its compute costs alone would suggest.",[27,48,49],{},"Everything else is an indirect cost, and it sits on both sides of the comparison, not just one. On the cloud side: the one-time work of migrating or re-architecting a workload to run there, staff time spent configuring, monitoring, and optimizing cloud resources, the cost-management and monitoring tooling bought specifically to track that spend, and security or compliance tooling layered on top. On the on-premises side: power and cooling for the room the hardware sits in, the real estate itself, a hardware refresh every few years as equipment ages out, and staff time spent racking, patching, and eventually disposing of retired equipment, the same maintenance burden the first lesson in this domain described as one of the original reasons the cloud exists.",[22,51,53],{"id":52},"the-trap-comparing-only-whats-easy-to-compare","The trap: comparing only what's easy to compare",[27,55,56],{},"It is tempting to run this comparison by looking up 2 numbers, this quarter's cloud bill and the sticker price of equivalent server hardware, and declaring whichever one is smaller the winner. Neither number is TCO. The cloud bill leaves out the staff and tooling built up around it. The hardware sticker price leaves out power, cooling, and the refresh cycle that arrives again in 3 to 5 years.",[27,58,59],{},"The 37signals case is a useful, real example of how easy this trap is to fall into even when a company is genuinely trying to be rigorous. Independent reporting on the move specifically noted that its published savings figures did not yet account for future hardware refresh costs, the additional operations staff the move required, or the ongoing cost of running data center space, power, and cooling. That is not a criticism of 37signals's decision, which may well still hold up once those categories are counted. It is a demonstration that even a company publicly making the case for owning hardware had not, at the point those figures were reported, finished counting every category a full TCO comparison requires.",[22,61,63],{"id":62},"worked-example-a-3-year-comparison-done-honestly","Worked example: a 3-year comparison, done honestly",[27,65,66],{},"Take a workload with steady, predictable traffic and compare 3 years of on-premises ownership against 3 years in the cloud, counting the indirect costs on both sides.",[68,69,70,86],"table",{},[71,72,73],"thead",{},[74,75,76,80,83],"tr",{},[77,78,79],"th",{},"Cost category",[77,81,82],{},"On-premises (3 years)",[77,84,85],{},"Cloud (3 years)",[87,88,89,101,112,122,132,143],"tbody",{},[74,90,91,95,98],{},[92,93,94],"td",{},"Compute and storage / hardware",[92,96,97],{},"$120,000 (upfront purchase)",[92,99,100],{},"$270,000 ($7,500/month)",[74,102,103,106,109],{},[92,104,105],{},"Power and cooling",[92,107,108],{},"$45,000 ($15,000/year)",[92,110,111],{},"--",[74,113,114,117,119],{},[92,115,116],{},"Cost-management and monitoring tooling",[92,118,111],{},[92,120,121],{},"$6,000 ($2,000/year)",[74,123,124,127,129],{},[92,125,126],{},"One-time migration",[92,128,111],{},[92,130,131],{},"$20,000",[74,133,134,137,140],{},[92,135,136],{},"Staff time",[92,138,139],{},"$150,000 ($50,000/year)",[92,141,142],{},"$75,000 ($25,000/year)",[74,144,145,151,156],{},[92,146,147],{},[148,149,150],"strong",{},"Total",[92,152,153],{},[148,154,155],{},"$315,000",[92,157,158],{},[148,159,160],{},"$371,000",[27,162,163],{},"For this specific, steady workload, the honest 3-year comparison favors on-premises hardware, by about $56,000, and not simply because the cloud's metered bill is bigger than the hardware's sticker price. It only becomes clear once staffing and tooling are counted on both sides. This is the same shape of decision 37signals made, at a much larger scale.",[27,165,166],{},"Change one assumption and the answer can flip. Give this workload a traffic pattern that spikes to 3 times its baseline for 2 weeks a year, and the on-premises side now needs hardware sized for a peak it uses for 2 weeks and leaves idle the rest of the year, the exact overprovisioning problem the cloud was built to remove. The cloud side, by contrast, simply scales up for those 2 weeks and back down afterward, paying only for the extra capacity it actually used. That single change in workload shape is often enough to tip the comparison the other way. Neither \"the cloud is always cheaper\" nor \"the cloud is always a ripoff\" is a rule you can memorize; TCO is a calculation you run for a specific workload, not a verdict that transfers from one company's case to another's.",[168,169],"infographic",{"alt":170,"slug":171},"An iceberg diagram showing the visible cloud invoice above the waterline and the larger, hidden costs of staff, tooling, migration, power, and cooling below it.","total-cost-of-ownership-iceberg",[22,173,175],{"id":174},"finops-the-discipline-that-keeps-tco-from-going-stale","FinOps: the discipline that keeps TCO from going stale",[27,177,178],{},"A TCO calculation is a snapshot, priced once for a decision made at one point in time. Cloud spending does not stay still after that decision: it changes every time an engineer spins up a new resource, which is exactly what makes it different from a fixed annual data center budget set once and left alone. FinOps is the discipline built to manage that difference. The FinOps Foundation defines it as an operational framework and cultural practice that maximizes the business value of technology, enables timely, data-driven decisions, and creates financial accountability through collaboration between engineering, finance, and business teams, rather than treating cost as something only a finance department reviews after the fact.",[27,180,181],{},"This is the same idea AWS's own Well-Architected Framework points at with its cost optimization principles: implementing cloud financial management as a real organizational capability, and continuously analyzing and attributing expenditure so a workload's owner can see, and act on, what it actually costs. FinOps is what it looks like to run that analysis continuously instead of once a year.",[22,183,185],{"id":184},"where-this-leaves-you","Where this leaves you",[27,187,188],{},"A cloud invoice and a hardware quote are both partial answers. Before comparing 2 ways of running a workload, list every direct and indirect cost on both sides, price them over the same multi-year window, and only then compare totals. Get that habit right once, in a spreadsheet, and FinOps is simply what it looks like to keep doing it continuously instead of once.",[27,190,191],{},"That closes out the economics of the cloud: what problem it solves, how you pay for it, and what it actually costs to run. The next domain leaves cost behind and turns to the services themselves, starting with the 3 ways cloud providers package what they sell: IaaS, PaaS, and SaaS.",{"title":193,"searchDepth":194,"depth":194,"links":195},"",3,[196,198,199,200,201,202,203],{"id":24,"depth":197,"text":25},2,{"id":35,"depth":197,"text":36},{"id":42,"depth":197,"text":43},{"id":52,"depth":197,"text":53},{"id":62,"depth":197,"text":63},{"id":174,"depth":197,"text":175},{"id":184,"depth":197,"text":185},"md",[206],{"slug":171,"concept":207,"style":208,"aspectRatio":209,"labels":210},"An iceberg diagram split by a waterline. Above the waterline, small and clearly visible, sits an invoice icon labeled with the direct, metered costs: compute, storage, data transfer. Below the waterline, a much larger submerged mass carries the indirect costs: staff time, monitoring and cost-management tooling, security and compliance tooling, migration effort, and, on a mirrored on-premises side, power, cooling, and hardware refresh cycles. A footer strip carries the takeaway that TCO counts everything below the waterline too.","diagram","4:3",[211,212,213],"Above the waterline: the invoice. Compute, storage, and data transfer, the price everyone sees.","Below the waterline: migration, staff time, monitoring and security tooling, power, cooling, and hardware refresh cycles.","Total cost of ownership counts everything below the waterline too.",[12,13,14,15],{},true,"/courses/cloud-computing-fundamentals/en/domains/01-cloud-concepts-and-economics/03-cloud-economics/03-total-cost-of-ownership",{"passingScore":219,"questions":220},70,[221,230,236,244,253,261,269],{"question":222,"type":223,"options":224,"correctAnswer":226,"explanation":229},"What does total cost of ownership (TCO) measure that a monthly cloud invoice does not?","single",[225,226,227,228],"TCO measures only the compute portion of a bill","TCO measures the complete cost of running a system, including the indirect costs an invoice or hardware quote leaves out","TCO measures only the upfront hardware price","TCO is another name for the on-demand pricing rate","A monthly invoice or a hardware quote each shows one visible price. TCO adds everything around that price, staff time, tooling, migration effort, power and cooling, over a multi-year period, so the comparison reflects the full cost rather than just the part that happens to appear on a single bill.",{"question":231,"type":223,"options":232,"correctAnswer":234,"explanation":235},"37signals' publicly reported cloud repatriation savings, according to independent reporting, fully accounted for hardware refresh costs, new operations staff, and data center power and cooling.",[233,234],"True","False","Independent coverage of 37signals' move noted that its published savings figures did not yet include future hardware refresh costs, the new operations roles the move required, or the ongoing cost of running its own data center space. That gap is exactly the kind of incomplete comparison a rigorous TCO analysis is built to catch, even when the company making the comparison is genuinely trying to be transparent.",{"question":237,"type":223,"options":238,"correctAnswer":241,"explanation":243},"A finance team compares 2 options for a workload by looking up this quarter's cloud bill and the sticker price of equivalent server hardware, then picks whichever number is lower. What is the main problem with this comparison?",[239,240,241,242],"It ignores the on-demand discount percentage","It correctly identifies the cheaper option in every case","It leaves out the indirect costs on both sides, staff time, tooling, power and cooling, and migration, that a single invoice or sticker price does not show","Cloud bills and hardware prices cannot be compared to each other at all","Both numbers in this comparison are partial. The cloud bill leaves out the staff and tooling built up around it; the hardware sticker price leaves out power, cooling, and the refresh cycle that arrives again in 3 to 5 years. A real TCO comparison prices every category on both sides over the same window before declaring a winner.",{"question":245,"type":246,"options":247,"correctAnswers":251,"explanation":252},"Which of the following are indirect costs that belong in a cloud TCO calculation, based on this lesson? (Select all that apply.)","multiple",[248,249,250,116],"Staff time spent configuring and monitoring cloud resources","The on-demand hourly compute rate itself","Migration and re-architecting work needed to move a workload to the cloud",[248,250,116],"Staff time, migration effort, and the tooling used to watch cloud spend are all indirect costs that sit around the metered bill, not on it. The on-demand hourly rate is the one direct, metered cost in this list, the part of TCO that already shows up on the invoice.",{"question":254,"type":223,"options":255,"correctAnswer":258,"explanation":260},"Using the 3-year worked example in this lesson, what is the main reason the on-premises total ends up lower than the cloud total for that specific workload?",[256,257,258,259],"The cloud path has a larger one-time migration cost than the entire on-premises hardware purchase","On-premises power and cooling costs are cheaper than any cloud data-transfer fee","The workload is steady and predictable, so it gets no benefit from the cloud's ability to scale usage up and down","Cloud providers charge more for storage than for compute in every case","The cloud's cost advantage usually comes from matching spend to a workload that varies. A workload that runs at the same steady size around the clock never uses that flexibility, so it pays the cloud's metered rate every hour without ever getting the payoff that variability would provide, which is what lets the on-premises total come out ahead here.",{"question":262,"type":223,"options":263,"correctAnswer":264,"explanation":268},"A workload that normally runs at a steady baseline spikes to 3 times its usual size for 2 weeks a year. How does this change a TCO comparison between on-premises and cloud?",[264,265,266,267],"It can favor the cloud, since on-premises would need hardware sized for the rare spike, while cloud capacity can scale up temporarily and back down","It does not change anything; TCO comparisons never depend on the shape of a workload","It favors on-premises further, since owned hardware handles spikes better than the cloud does","It eliminates the need to calculate TCO at all","On-premises hardware has to be sized for the worst 2 weeks of the year and then sits underused the rest of the time, exactly the overprovisioning problem from earlier in this domain. Cloud capacity can scale up for those 2 weeks and back down afterward, so a spiky workload often tips a TCO comparison in the cloud's favor even when a steady one does not.",{"question":270,"type":223,"options":271,"correctAnswer":273,"explanation":276},"According to the FinOps Foundation, what is FinOps primarily about?",[272,273,274,275],"Cutting cloud costs to the lowest possible number, regardless of business impact","A cultural practice and operational framework that creates financial accountability and data-driven decisions across engineering, finance, and business teams","A pricing model offered directly by AWS, Azure, and Google Cloud","A once-a-year budgeting exercise kept separate from engineering","FinOps is defined by its own foundation as a cross-team cultural practice, not simply a cost-cutting mandate or a once-a-year budget review. It exists because cloud spending changes every time an engineer provisions a resource, so managing it well requires the same continuous attention as security or reliability, with finance and engineering making decisions together.",{"title":7,"description":8},"courses/cloud-computing-fundamentals/en/domains/01-cloud-concepts-and-economics/03-cloud-economics/03-total-cost-of-ownership","wol5owsWNcpygHYTaqOtd77uM9jYLnRLVOafyyyEKPU",{"locked":5,"reason":3,"meta":281,"item":290},{"title":282,"description":283,"isFree":5,"estimatedMinutes":9,"difficulty":284,"learningObjectives":285},"Cloud Pricing Models","On-demand, reserved and committed-use, and spot pricing across AWS, Azure, and Google Cloud: the discount each one trades for a commitment, and which workload actually fits each one.","beginner",[286,287,288,289],"Explain why cloud providers discount pricing in exchange for a usage commitment, and what a workload gives up to get that discount","Compare on-demand, reserved and committed-use, and spot pricing by discount size, commitment length, and interruption risk","Match a workload's predictability and interruption tolerance to the pricing model that fits it","Calculate the monthly savings a committed-use discount produces over on-demand pricing for a given spend",{"id":291,"title":282,"body":292,"description":283,"difficulty":284,"estimatedMinutes":9,"extension":204,"infographics":442,"isFree":5,"learningObjectives":451,"meta":452,"navigation":216,"path":453,"quiz":454,"seo":508,"stem":509,"__hash__":510},"courses/courses/cloud-computing-fundamentals/en/domains/01-cloud-concepts-and-economics/03-cloud-economics/02-cloud-pricing-models.md",{"type":19,"value":293,"toc":433},[294,298,301,305,308,312,315,318,321,324,328,331,334,337,341,414,418,422,425,428,430],[22,295,297],{"id":296},"paying-the-same-rate-whether-you-need-flexibility-or-not","Paying the same rate whether you need flexibility or not",[27,299,300],{},"Run a database server 24 hours a day, every day, for 3 years straight, and you are still charged the exact same per-hour rate as a team that might shut its server down tomorrow. On-demand pricing is built for that second team, the one that needs the freedom to walk away at any moment. If a workload never walks away, that built-in flexibility is not free. The team running it every single hour is quietly paying for an option it never uses.",[22,302,304],{"id":303},"on-demand-pay-for-exactly-what-you-use-whenever-you-use-it","On-demand: pay for exactly what you use, whenever you use it",[27,306,307],{},"On-demand pricing has no upfront payment and no long-term commitment. AWS bills EC2 On-Demand Instances by the hour or the second, with a 60-second minimum, at a rate set by the provider and unaffected by how long someone has been a customer. This is the model built for the exact problem the first lesson in this domain opened with: guessing how much capacity a brand-new or unpredictable workload will need. Guess wrong on-demand, and the fix is a few clicks, not a hardware return.",[22,309,311],{"id":310},"reserved-and-committed-use-pricing-trading-flexibility-for-a-discount","Reserved and committed-use pricing: trading flexibility for a discount",[27,313,314],{},"Commit to steady usage for 1 or 3 years, and a provider prices that certainty into a lower rate. AWS calls this Reserved Instances or Savings Plans, discounting up to 72% off On-Demand pricing, with a 3-year term always discounting more than a 1-year one because it removes more uncertainty from the provider's own planning. Payment can be split 3 ways: All Upfront, Partial Upfront, or No Upfront, and generally the more you pay upfront, the deeper the discount.",[27,316,317],{},"Reserved Instances come in 2 offering classes, and the difference between them is worth knowing precisely. Standard Reserved Instances lock in the largest discount, but the instance family and Region are fixed for the term; they can be modified within limits but never exchanged for something different. Convertible Reserved Instances trade some of that discount away in exchange for the right to exchange the reservation later for a different instance family, useful for a team that expects its needs to shift before the term ends.",[27,319,320],{},"Other providers sell the same underlying idea under different names. Azure calls its version Reserved VM Instances, also up to 72% off pay-as-you-go pricing, and adds something specific to its own business: Azure Hybrid Benefit lets a company that already owns Windows Server or SQL Server licenses apply them in the cloud, stacking with a reservation for a combined discount of up to 85%. Google Cloud calls the equivalent Committed Use Discounts, up to 55% off standard machine types and up to 70% off memory-optimized ones, in exchange for the same 1- or 3-year commitment.",[27,322,323],{},"Google Cloud adds a second discount that AWS and Azure do not offer at all: the Sustained Use Discount, applied automatically, with no commitment of any kind. Run an eligible VM for more than 25% of a billing month, and Google Cloud starts discounting it on its own, with the discount growing as the VM's runtime approaches the full month, up to about 30% off. On AWS and Azure, a discount only exists if you commit to it in advance. On Google Cloud, simply running a workload long enough earns one automatically. That is a genuine structural difference between how the 3 providers price commitment, not just 3 names for the same mechanism.",[22,325,327],{"id":326},"spot-and-preemptible-the-deepest-discount-with-a-real-catch","Spot and preemptible: the deepest discount, with a real catch",[27,329,330],{},"Spot pricing sells unused capacity that a provider would rather discount heavily than leave idle. AWS EC2 Spot Instances discount up to 90% off On-Demand pricing, but AWS can reclaim that capacity with only a 2-minute warning whenever it needs it for an on-demand or committed customer instead. Azure Spot Virtual Machines discount up to 90% off pay-as-you-go rates and offer no reservation option at all. Google Cloud Spot VMs discount up to 91%, and can be preempted at any time.",[27,332,333],{},"This model fits fault-tolerant, interruption-tolerant work: batch data processing, CI/CD pipelines, rendering jobs, anything that checkpoints its progress often enough that an interruption costs a few minutes, not a failed job.",[27,335,336],{},"It is tempting to treat spot pricing as simply a cheaper version of on-demand. It is not the same product at a lower price. It is fundamentally uncommitted capacity that the provider can take back whenever a paying on-demand or committed customer needs it instead. Putting a production database, something that cannot tolerate a sudden shutdown, on spot pricing is one of the most common cost-optimization mistakes teams make, and a frequent trap in exam-style scenarios for exactly that reason.",[22,338,340],{"id":339},"the-3-models-side-by-side","The 3 models, side by side",[68,342,343,358],{},[71,344,345],{},[74,346,347,349,352,355],{},[77,348],{},[77,350,351],{},"On-Demand",[77,353,354],{},"Reserved / Committed Use",[77,356,357],{},"Spot / Preemptible",[87,359,360,374,387,400],{},[74,361,362,365,368,371],{},[92,363,364],{},"Discount vs on-demand rate",[92,366,367],{},"None (this is the baseline)",[92,369,370],{},"Up to 72% (AWS, Azure), up to 70% (Google Cloud)",[92,372,373],{},"Up to 90 to 91%",[74,375,376,379,382,385],{},[92,377,378],{},"Commitment",[92,380,381],{},"None",[92,383,384],{},"1 or 3 years",[92,386,381],{},[74,388,389,392,395,397],{},[92,390,391],{},"Can be interrupted",[92,393,394],{},"No",[92,396,394],{},[92,398,399],{},"Yes, with little to no notice",[74,401,402,405,408,411],{},[92,403,404],{},"Best fit",[92,406,407],{},"Unpredictable, short-lived, or brand-new workloads",[92,409,410],{},"Steady, predictable baseline capacity",[92,412,413],{},"Fault-tolerant, interruption-tolerant batch work",[168,415],{"alt":416,"slug":417},"A spectrum showing On-Demand, Reserved or Committed Use, and Spot pricing arranged by discount size, with discount growing as commitment and flexibility trade off against each other.","cloud-pricing-models-spectrum",[22,419,421],{"id":420},"worked-example-what-a-commitment-is-actually-worth","Worked example: what a commitment is actually worth",[27,423,424],{},"Say a workload runs steadily enough that its on-demand bill is $1,000 a month. Commit that workload to a 3-year Savings Plan at the ceiling AWS advertises, up to 72% off, and the same workload costs about $280 a month instead, a savings of roughly $720 a month, or about $8,640 over a year, in exchange for giving up the ability to walk away without penalty.",[27,426,427],{},"That discount only pays off if the commitment actually gets used. A 3-year Reserved Instance sized for a project that gets cancelled 8 months in is now a fixed cost with 28 months left to run and nothing left to run it on, which is exactly why committing should follow measured, steady usage, not a guess about future growth, the same guessing problem that made traditional on-premises IT so expensive in the first place.",[22,429,185],{"id":184},[27,431,432],{},"Match the commitment to how sure you are, and to how much an interruption would actually cost. A workload running every day for the next 3 years belongs on a committed rate. A workload that can lose an hour of progress and simply restart belongs on spot. Everything in between stays on-demand until there is enough usage history to commit with confidence. None of these hourly rates is the full story, though: the price on this page is not the same thing as what a workload actually costs a company to run, once the people, the tools, and everything built around it get counted too. That gap is exactly what total cost of ownership measures, and it is where this topic goes next.",{"title":193,"searchDepth":194,"depth":194,"links":434},[435,436,437,438,439,440,441],{"id":296,"depth":197,"text":297},{"id":303,"depth":197,"text":304},{"id":310,"depth":197,"text":311},{"id":326,"depth":197,"text":327},{"id":339,"depth":197,"text":340},{"id":420,"depth":197,"text":421},{"id":184,"depth":197,"text":185},[443],{"slug":417,"concept":444,"style":208,"aspectRatio":445,"labels":446},"A horizontal spectrum diagram with 3 positions along one axis labeled discount size, increasing left to right. On-Demand sits at the left end with an icon showing full flexibility and no lock. Reserved / Committed Use sits in the middle with an icon showing a calendar spanning 1 to 3 years. Spot / Preemptible sits at the right end with an icon showing a capacity block that can be pulled away. Each position carries a short caption with its discount ceiling and its main tradeoff. A footer strip carries the takeaway that discount grows as flexibility shrinks.","16:9",[447,448,449,450],"On-Demand: no commitment, full flexibility, the baseline rate","Reserved / Committed Use: 1 to 3-year commitment, up to 72% off","Spot / Preemptible: no commitment, up to 90% off, capacity can be reclaimed anytime","Discount grows as flexibility shrinks",[286,287,288,289],{},"/courses/cloud-computing-fundamentals/en/domains/01-cloud-concepts-and-economics/03-cloud-economics/02-cloud-pricing-models",{"passingScore":219,"questions":455},[456,464,468,475,483,492,500],{"question":457,"type":223,"options":458,"correctAnswer":460,"explanation":463},"What does a cloud provider get in return for offering a steep discount on reserved or committed-use pricing?",[459,460,461,462],"A promise that the customer will only ever use spot capacity","A predictable, committed usage pattern it can plan its own capacity around","A one-time setup fee paid through a reseller","Exclusive rights to the customer's application data","Reserved and committed-use discounts exist because a provider can plan its own data center capacity more efficiently when it knows, in advance, how much a customer will use and for how long. The customer trades flexibility for that certainty, and the provider prices the discount accordingly.",{"question":465,"type":223,"options":466,"correctAnswer":234,"explanation":467},"Amazon EC2 Spot Instances let you reserve guaranteed capacity for a fixed term, the same way Reserved Instances do.",[233,234],"Spot Instances have no reservation and no guaranteed term. They use spare capacity that AWS can reclaim with as little as 2 minutes of notice when it needs that capacity for on-demand or committed customers instead, which is the opposite of a Reserved Instance's guaranteed term.",{"question":469,"type":223,"options":470,"correctAnswer":473,"explanation":474},"A team runs a nightly batch job that reprocesses log files, checkpoints its progress every few minutes, and can safely restart if interrupted. Which pricing model fits this workload best?",[351,471,472,473],"3-year Reserved Instance, paid All Upfront","Dedicated Host","Spot or preemptible capacity","A job that checkpoints frequently and tolerates restarts is exactly what spot and preemptible pricing is built for: the deepest discount, in exchange for the provider's right to reclaim the capacity at any time. Committing this workload to a 3-year reservation would lock in a fixed cost for a job that does not need the guarantee.",{"question":476,"type":223,"options":477,"correctAnswer":478,"explanation":482},"What is the key difference between a Standard and a Convertible Reserved Instance on AWS?",[478,479,480,481],"Standard offers the largest discount but cannot be exchanged for a different instance family; Convertible offers a smaller discount but can be exchanged","Standard can only be purchased with a No Upfront payment option","Convertible Reserved Instances always cost more than On-Demand pricing","Standard applies only to spot capacity, and Convertible applies only to on-demand capacity","Standard Reserved Instances lock in the largest discount but can only be modified, not exchanged for a different instance family. Convertible Reserved Instances trade some of that discount for the ability to exchange the reservation later if instance needs change, which is the boundary the exam expects you to know between the two.",{"question":484,"type":246,"options":485,"correctAnswers":490,"explanation":491},"Which of the following are true about Google Cloud's discount model, based on this lesson? (Select all that apply.)",[486,487,488,489],"Sustained Use Discounts apply automatically once a VM runs more than 25% of a billing month, with no upfront commitment","Committed Use Discounts require a 1- or 3-year commitment, similar to AWS Reserved Instances","Spot VMs on Google Cloud can never be preempted once they start running","Sustained Use and Committed Use discounts can both be stacked on top of Spot pricing for the same VM",[486,487],"Google Cloud is unusual in offering an automatic discount, the Sustained Use Discount, with no commitment at all, on top of a committed-use option similar to AWS and Azure. Spot VMs can be preempted at any time, and discount types cannot be combined: a VM running on Spot pricing does not also collect Sustained Use or Committed Use discounts.",{"question":493,"type":223,"options":494,"correctAnswer":497,"explanation":499},"A workload costs $1,000 a month at on-demand rates. The team commits to a 3-year Savings Plan advertised at up to 72% off On-Demand pricing. Roughly what will the monthly bill be after the discount?",[495,496,497,498],"$720","$500","$280","$72","A 72% discount off $1,000 leaves 28% of the original cost, or about $280 a month. That is roughly $720 a month in savings, or about $8,640 a year, in exchange for committing to that usage level for the full 3-year term.",{"question":501,"type":223,"options":502,"correctAnswer":504,"explanation":507},"A company signs a 3-year Reserved Instance commitment sized for a project that gets cancelled 8 months later. What does this scenario best illustrate?",[503,504,505,506],"Reserved pricing always costs more than On-Demand pricing in the end","A commitment only pays off if the usage it was sized for actually happens","Spot capacity should have been used instead of a Reserved Instance","The provider will automatically refund the unused months","A Reserved Instance is a bet that the usage will continue for the full term. When the project ends early, the remaining 28 months still have to be paid for, turning what looked like savings into a fixed cost with nothing left to run on it. This is exactly why committing should follow measured, steady usage rather than a guess about future growth.",{"title":282,"description":283},"courses/cloud-computing-fundamentals/en/domains/01-cloud-concepts-and-economics/03-cloud-economics/02-cloud-pricing-models","m0ezqHWY_aaTLqn2jhlWvCKkCV0ftmkZ_lsXBk53fMU",{"locked":5,"reason":3,"meta":512,"item":521},{"title":513,"description":514,"isFree":216,"estimatedMinutes":515,"difficulty":284,"learningObjectives":516},"Infrastructure as a Service (IaaS)","The service model that hands you raw compute, storage, and networking and leaves the operating system, runtime, and application on your side of the line, with AWS EC2, Azure Virtual Machines, and Google Compute Engine as the products that deliver it.",15,[517,518,519,520],"Define Infrastructure as a Service (IaaS) using the NIST framework","Identify which layers of the stack IaaS leaves for the customer versus the provider","Name IaaS products from major providers and what each one delivers","Explain why virtualized infrastructure still leaves real operational work on the customer",{"id":522,"title":513,"body":523,"description":514,"difficulty":284,"estimatedMinutes":515,"extension":204,"infographics":682,"isFree":216,"learningObjectives":683,"meta":684,"navigation":216,"path":685,"quiz":686,"seo":733,"stem":734,"__hash__":735},"courses/courses/cloud-computing-fundamentals/en/domains/02-cloud-services-and-architecture/01-cloud-service-models/01-infrastructure-as-a-service.md",{"type":19,"value":524,"toc":673},[525,529,532,536,539,542,546,619,622,626,648,651,655,658,661,665,668,670],[22,526,528],{"id":527},"the-layer-a-hypervisor-hands-you","The layer a hypervisor hands you",[27,530,531],{},"You already know a hypervisor can slice one physical server into dozens of isolated virtual machines, and that a real cloud service lets you request one of those machines yourself, on demand, with no ticket and no wait. What you have not seen yet is what a provider actually sells you once that machine exists, and how much of the stack above it lands in your lap instead of theirs. Infrastructure as a Service is the model that hands you the most: raw compute, storage, and networking, with the operating system and everything above it left for you to install, configure, and patch.",[22,533,535],{"id":534},"the-nist-definition-in-practice","The NIST definition, in practice",[27,537,538],{},"NIST's definition of IaaS is precise about the split: the consumer can \"provision processing, storage, networks, and other fundamental computing resources\" and \"deploy and run arbitrary software, which can include operating systems and applications.\" The consumer does not manage the underlying cloud infrastructure, but has control over operating systems, storage, and deployed applications, and possibly limited control of select networking components, such as host firewalls.",[27,540,541],{},"That last clause matters. You do not touch the physical switch or the hypervisor, but you do configure the firewall rules that decide which traffic reaches your own virtual machine. IaaS gives you a box, full control of everything inside it, and a narrow window into the network path that reaches it.",[22,543,545],{"id":544},"who-manages-what","Who manages what",[68,547,548,558],{},[71,549,550],{},[74,551,552,555],{},[77,553,554],{},"Layer",[77,556,557],{},"Who manages it in IaaS",[87,559,560,568,575,582,590,597,604,611],{},[74,561,562,565],{},[92,563,564],{},"Networking (physical)",[92,566,567],{},"Provider",[74,569,570,573],{},[92,571,572],{},"Servers and storage hardware",[92,574,567],{},[74,576,577,580],{},[92,578,579],{},"Virtualization (the hypervisor)",[92,581,567],{},[74,583,584,587],{},[92,585,586],{},"Operating system",[92,588,589],{},"You",[74,591,592,595],{},[92,593,594],{},"Runtime and middleware",[92,596,589],{},[74,598,599,602],{},[92,600,601],{},"Application code",[92,603,589],{},[74,605,606,609],{},[92,607,608],{},"Data",[92,610,589],{},[74,612,613,616],{},[92,614,615],{},"Host firewall rules",[92,617,618],{},"You (limited networking control)",[27,620,621],{},"Compare that to the 5 characteristics from the previous topic: resource pooling and rapid elasticity are what let the provider hand you that virtual machine in seconds. IaaS is where those characteristics get packaged into an actual product you can buy.",[22,623,625],{"id":624},"real-products-that-deliver-iaas","Real products that deliver IaaS",[627,628,629,636,642],"ul",{},[630,631,632,635],"li",{},[148,633,634],{},"Virtual machines:"," AWS EC2 (Elastic Compute Cloud), Azure Virtual Machines, Google Compute Engine",[630,637,638,641],{},[148,639,640],{},"Block and object storage:"," AWS EBS and S3, Azure Managed Disks and Blob Storage, Google Persistent Disk and Cloud Storage",[630,643,644,647],{},[148,645,646],{},"Virtual networking:"," AWS VPC, Azure Virtual Network, Google VPC",[27,649,650],{},"Every one of these gives you a resource you provision, configure, and are responsible for keeping patched and running. None of them ships an application. They ship the pieces you build one from.",[22,652,654],{"id":653},"worked-example-what-launching-a-vm-actually-commits-you-to","Worked example: what launching a VM actually commits you to",[27,656,657],{},"Launch an EC2 instance and AWS asks 2 questions first: which OS image (an AMI, for example Amazon Linux 2023) and which instance type. Pick a t3.micro, 2 vCPUs and 1 GiB of memory, and AWS's on-demand rate in US East (N. Virginia) is $0.0104 an hour, about $7.59 for a 730-hour month, with storage and data transfer billed separately.",[27,659,660],{},"That price buys you a running Linux box and nothing else. Nobody at AWS installs a web server on it, applies its security patches, or configures its firewall. You do all 3, the same way you would on a physical machine, except you never touched a data center, ordered hardware, or waited for a shipment.",[22,662,664],{"id":663},"the-misconception-its-in-the-cloud-does-not-mean-its-someone-elses-problem","The misconception: \"it's in the cloud\" does not mean \"it's someone else's problem\"",[27,666,667],{},"It is tempting to hear \"cloud\" and assume the provider now handles security and maintenance for you. IaaS does not work that way. The provider took the procurement, power, cooling, and physical maintenance off your plate, the exact burden the first lesson in this course described. It did not take the operating system off your plate. An unpatched IaaS virtual machine is just as vulnerable as an unpatched physical server sitting in your own building; the vulnerability is still yours to close.",[22,669,185],{"id":184},[27,671,672],{},"IaaS gives you the most control of the 3 service models, and, in exchange, the most responsibility: everything from the operating system up is yours to run. The next lesson covers what happens when a provider takes the operating system and runtime off your plate too, and what you get, and give up, in return.",{"title":193,"searchDepth":194,"depth":194,"links":674},[675,676,677,678,679,680,681],{"id":527,"depth":197,"text":528},{"id":534,"depth":197,"text":535},{"id":544,"depth":197,"text":545},{"id":624,"depth":197,"text":625},{"id":653,"depth":197,"text":654},{"id":663,"depth":197,"text":664},{"id":184,"depth":197,"text":185},[],[517,518,519,520],{},"/courses/cloud-computing-fundamentals/en/domains/02-cloud-services-and-architecture/01-cloud-service-models/01-infrastructure-as-a-service",{"passingScore":219,"questions":687},[688,696,700,708,717,725],{"question":689,"type":223,"options":690,"correctAnswer":693,"explanation":695},"A team needs to install a specific Linux kernel version required by a legacy driver, with full root access to configure it. Which service model gives them that?",[691,692,693,694],"SaaS","Traditional on-premises hosting only","IaaS","PaaS","IaaS is the only cloud service model that hands the customer the operating system layer, including root access to install a specific kernel version. PaaS and SaaS both take the OS off the customer's hands, and on-premises hosting is not a cloud service model at all, just the alternative the cloud replaces.",{"question":697,"type":223,"options":698,"correctAnswer":234,"explanation":699},"In Infrastructure as a Service, the provider manages the guest operating system running inside your virtual machine.",[233,234],"In IaaS, the customer manages the guest operating system, along with the runtime, applications, and data. The provider's responsibility stops at the hypervisor: it manages the physical servers, storage, networking, and virtualization layer that the virtual machine runs on.",{"question":701,"type":223,"options":702,"correctAnswer":705,"explanation":707},"Under the NIST definition of IaaS, which of these might the consumer have limited control over, in addition to the operating system, storage, and deployed applications?",[703,704,705,706],"Nothing, IaaS and PaaS manage identical layers","The physical network switches","Select networking components, such as host firewalls","The hypervisor itself","NIST's IaaS definition specifically calls out possible limited control of select networking components, like host firewalls, alongside full control of the OS, storage, and applications. The physical switches and the hypervisor stay firmly on the provider's side in every case.",{"question":709,"type":246,"options":710,"correctAnswers":715,"explanation":716},"Which of the following are the customer's responsibility under IaaS? (Select all that apply.)",[711,712,713,714],"Patching the operating system","Maintaining the physical server hardware","Installing and configuring the application runtime","Managing the hypervisor",[711,713],"Patching the OS and installing the runtime both sit above the hypervisor, which is exactly where the customer's responsibility begins in IaaS. Physical hardware maintenance and hypervisor management stay with the provider in every one of the 3 service models, not just IaaS.",{"question":718,"type":223,"options":719,"correctAnswer":722,"explanation":724},"Which of these is an IaaS product?",[720,721,722,723],"Salesforce","Google Workspace","Google Compute Engine","AWS Elastic Beanstalk","Google Compute Engine provisions virtual machines and leaves the OS, runtime, and application to the customer, which is the IaaS pattern. Salesforce and Google Workspace are complete applications you just use, SaaS, and Elastic Beanstalk manages the OS and runtime for you, which makes it PaaS.",{"question":726,"type":223,"options":727,"correctAnswer":729,"explanation":732},"A team runs a t3.micro EC2 instance priced at $0.0104 per hour continuously for a 730-hour month, before counting storage or data transfer. Approximately what does the compute cost that month?",[728,729,730,731],"$0.76","$7.59","$75.90","$759.00","$0.0104 multiplied by 730 hours comes to about $7.59. That figure only covers the compute hours themselves; a real bill would add storage and any data transfer on top of it.",{"title":513,"description":514},"courses/cloud-computing-fundamentals/en/domains/02-cloud-services-and-architecture/01-cloud-service-models/01-infrastructure-as-a-service","E2TtoH5uaTA_XFqzAN-GojxuORCUsRcIDLg93LcegCI"]