Cloud computing fundamentals
Cloud computing delivers computing services over the internet. The business case rests on a shift from capital expenditure to operational expenditure. Capital expenditure (CapEx) means buying assets upfront: servers, storage, networking hardware, data center space. All of that spending happens before a single user logs in, and the asset depreciates over its lifetime whether or not you are using it. Operational expenditure (OpEx) means paying for what you consume as you consume it, like an electricity bill. Cloud turns IT infrastructure into an OpEx model.
Consumption-based pricing means you pay for the actual resources used: compute hours, gigabytes of storage, gigabytes of data transferred. This model provides predictability (you can estimate costs based on projected usage), scalability (you can increase resources without hardware procurement), and elasticity (you can scale down and stop paying when demand drops).
The cloud benefits Azure emphasizes across its documentation: high availability (resources remain accessible with minimal downtime), scalability (handle increased demand), elasticity (automatically scale and release resources), agility (deploy new capabilities quickly), disaster recovery (geographic redundancy without owning multiple data centers), and security (built-in controls and compliance certifications).
Service models, deployment models, and Azure global infrastructure
The three cloud service models define how much of the stack Azure manages versus how much you manage. Infrastructure as a Service (IaaS) gives you virtual machines, networking, and storage. You manage the operating system, runtime, and application. Platform as a Service (PaaS) removes OS and runtime management. You deploy your application code and Azure manages the underlying platform. Azure App Service and Azure SQL Database are PaaS. Software as a Service (SaaS) delivers fully managed applications over the internet. Microsoft 365 is SaaS: you use the software but manage none of the infrastructure.
Deployment models describe where the infrastructure runs. Public cloud uses Microsoft's infrastructure shared across many customers. Private cloud uses dedicated infrastructure controlled by one organization, often on-premises using Azure Stack HCI. Hybrid cloud connects on-premises infrastructure to Azure, enabling data and applications to run where they are best suited. Multi-cloud uses services from multiple cloud providers.
Azure's global infrastructure consists of Regions (geographic areas containing one or more datacenters), Availability Zones (physically separate datacenters within a region with independent power, cooling, and networking), and Region Pairs (two regions within the same geography that Azure replicates data between for disaster recovery). Azure operates in more than 60 regions across the globe.
How to choose the correct answer
CapEx: upfront hardware purchase, depreciates over time. OpEx: pay-as-you-go consumption billing. Cloud = OpEx model.
IaaS: you manage OS and up. PaaS: you manage application and data only. SaaS: you manage nothing, just use the app.
Public cloud: shared infrastructure, Microsoft-owned. Private cloud: dedicated, one organization. Hybrid: on-premises + cloud connected.
Region: geographic cluster of datacenters. Availability Zone: isolated datacenter within a region, independent power.
Region Pairs: two paired regions for disaster recovery. Azure replicates certain services automatically to the paired region.
High availability: stay up. Scalability: handle more load. Elasticity: auto-scale up and down. Agility: deploy quickly.