Exam AZ-900 All QuestionsBrowse all questions from this exam
Go to Exam
Question 58

HOTSPOT -

For each of the following statements, select Yes if the statement is true. Otherwise, select No.

NOTE: Each correct selection is worth one point.

Hot Area:

    Correct Answer:

    One of the major changes that you will face when you move from on-premises cloud to the public cloud is the switch from capital expenditure (buying hardware) to operating expenditure (paying for service as you use it).

    Box 1: No -

    With the pay-as-go model, you pay for services as you use them. This is Opex (Operational Expenditure), not CapEx (Captial Expenditure). CapEx is where you pay for something upfront. For example, buying a new physical server.

    Box 2: No -

    Paying for electricity for your own datacenter will be classed as CapEx, not OpEx.

    Box 3: Yes -

    Deploying your own datacenter is an example of CapEx. This is because you need to purchase all the infrastructure upfront before you can use it.

    Reference:

    https://docs.microsoft.com/en-us/azure/architecture/cloud-adoption/appendix/azure-scaffold

Discussion
alanlzp1404

Box 2 should be OpEx as Paying Electricity is operating costs.

[Removed]

Well technically yes, paying electricity is an OpEx... BUT this question is tricky... I think it is No because the keywords here are "your data center". Any expense in your own data center would be classified as CapEx. That is the whole point of going to a Cloud Provider to switch all those CapEx expenses to OpEx. That is why I think it may be NO. Tricky question.

rimvydukas

You are wrong. We are paying for our datacenter electricity and these expenses are classified as opex.

comanbo

A quick test - CapEx is for depreciating assets - e.g. a server rack full of hardware. How is electricity depreciating? Electricity is consumed. So OpEx it is.

lombri

YOU ARE OVERTHINKING

blackty

Your definitely overthinking it.

CliffyNitsef

You're correct, it should be Yes for OpEx as paying electricity

Samco_lil

Do you pay for electricity to run vms on the cloud? The context of the question is clear.

Nathan9905454

From the word "your data center" mean this is private server so the answer is yes Paying your data center's electricity is an Operation Expenditure :)

MattRam

Agreed, but then I'm not an accountant. Do I need to take an accountancy exam first (some of these questions make my eyes roll).

DrcCZ

Correct answer for 2nd question (electricity in own Datacenter) is OpEx. Pretty sure about that as only mistake highlighted in my exam score was in area Azure Core Services, which is not the category for this question. And I put there Opex.

Yecine11y

Paying electricity for your data center is typically considered an operating expense (OPEX) rather than a capital expense (CAPEX). This is because electricity costs are ongoing and directly related to the day-to-day operation of the data center, rather than an investment in a physical asset with long-term value. OPEX includes costs incurred in the normal course of business to generate revenue, while CAPEX involves purchasing assets with long-term benefits.

slayersirius

As a previous accountant, please trust me: box 2 is 100% opex So the answer should be NYY

ADR7

Correct answers are No, Yes & Yes.

VaibhavGawali

I agree. I think paying electricity every month for datacenter is an Operational Expense.

ZForceX

Electricity = OpEx. You pay what you use and how much you use

tomeq82

Other sources cites electricity in DC as OpEx.

NAZJO

Paying for electricity is an OpEx cost. CapEx refers to upfront costs for assets and electricity is not an asset that can be owned.

BraveSirRobin

Paying the electricity bill is OpEx. The cost varies over time and you pay as you use it, after you use it.

glil

Box 2 should be OpEx as Paying Electricity is operating costs.

EhCloudGrrrU

Direct from MS: "Paying electricity for a data center is an example of an operational expense (OpEx). Operational expenses refer to the ongoing costs incurred in the day-to-day operations of a business or organization."

varinder82

Correct Answer : N Y Y

BJS78

Whoever still has doubts. let's make it simple: CAPEX = one-timer (usually) and act as investment. (you also will calculate depreciation over time in you accounting books) OPEX = continuous operational cost. Comes periodically.

Mole857

Electricity in your own data centre is always OpEx, never CapEx as it is a reocurring and running expense, not a one off expense.

odairm23

A eletricidade do seu data center é capex (pois faz parte da sua infra); então a Resp Correta é Não! NNS

Alonsochaves

I think paying electricity for on prem is CapEx. When migrating to Azure you are reducing or eliminating CapEX and turning to OpEx. So paying for it is not OpEx.

Yomzie

In a cloud environment, paying electricity costs for your own datacenter would typically be classified as a capital expenditure (CapEx). Capital expenditures are investments in assets that provide long-term benefits to the business, such as purchasing or building infrastructure like datacenters. When you invest in building or owning a datacenter, you're essentially making a long-term investment in physical assets. The costs associated with setting up and maintaining the datacenter, including electricity costs, are considered capital expenses. On the other hand, operating expenses (OpEx) are ongoing expenses required for the day-to-day operation of a business, such as utilities, salaries, and maintenance costs. While electricity costs for running servers and other equipment in a cloud environment would typically be classified as operating expenses, the costs associated with the initial setup and ongoing operation of the datacenter infrastructure itself would be considered capital expenditures.