CapEx vs OpEx

Capital expenditure (CapEx) means paying upfront for physical assets — servers, networking gear, data-center space — that depreciate over time and require forecasting demand years in advance. Operational expenditure (OpEx) covers recurring costs billed as the business consumes resources, the model behind AWS pay-as-you-go pricing. The exam frames this as a cloud value proposition: migrating to AWS converts large, fixed CapEx into variable OpEx, eliminating the risk of over- or under-provisioning. A common trap is treating Reserved Instances as CapEx — they remain OpEx because AWS owns and operates the hardware; the customer is committing to usage, not purchasing an asset.