Question 1
IntermediateDigital Transformation with Google Cloud · Fundamental Cloud Concepts
A global retail corporation is migrating its legacy on-premises ERP system to Google Cloud. The CFO is concerned about the shift in financial modeling. Currently, they depreciate hardware assets over 5 years. Upon migration to a fully cloud-native serverless architecture, how will their financial model primarily shift, and what is the immediate impact on their balance sheet?
Answer and explanation
Correct answer: A
Cloud computing shifts IT spending from Capital Expenditure (CapEx), where hardware is bought upfront and depreciated, to Operational Expenditure (OpEx), where services are paid for as they are consumed (pay-as-you-go). This increases financial agility and removes long-term asset lock-in.
