Google Cloud Digital Leader Practice Exam

What statement is true for an organization that has shifted from a CapEx to an OpEx spending model?

1. They will only pay for what they forecast.

2. Budgeting will only happen on an annual basis.

3. They will only pay for what they use.

4. Hardware procurement is done by a centralized team.

The correct answer is: They will only pay for what they use.

When an organization shifts from a Capital Expenditure (CapEx) model to an Operating Expenditure (OpEx) model, it typically means they are moving towards a consumption-based approach to spending. This is particularly relevant in cloud environments, where resources and services are billed based on usage rather than significant upfront investments. The core principle of the OpEx model is that organizations pay only for the resources and services they actually use. This allows for greater flexibility and scalability, as costs can adjust dynamically based on current needs. For instance, if an organization requires more computing power due to an increase in project demand, they can easily scale up their resources and only incur costs for that additional usage rather than committing to a long-term hardware purchase. In contrast, a CapEx model involves large initial investments in physical infrastructure and equipment, with costs being distributed over several years through depreciation. The OpEx model contributes to budget predictability and can improve cash flow management since expenses are spread out and align more closely with operational needs and revenue generation. The other options do not accurately reflect the nature of OpEx. For instance, forecasting usage does not guarantee that what is forecasted will match actual consumption, and budgeting is often more flexible than just annual cycles in an OpEx model.