What is cloud computing?
Cloud computingThe delivery of computing services — including virtual machines, storage, databases, networking, IoT, AI, and machine learning — over the internet, enabling on-demand provisioning, elastic scaling, and pay-as-you-go pricing. uses the internet rather than a fixed physical datacenter, so cloud infrastructure can be provisioned on demand, scaled up or down quickly, and released when no longer needed.
Key insight: Cloud computing shifts infrastructure from long procurement cycles to on-demand provisioning. A retail team expecting peak holiday traffic can deploy extra compute capacity for the season and scale it down afterward — paying only for what they used.
Shared Responsibility Model
The Shared responsibility modelA framework that defines which security and management tasks are handled by the cloud provider versus the customer, and how those responsibilities shift depending on the service type (IaaS, PaaS, or SaaS). divides security and management duties between provider and customer — and that division shifts depending on whether you use IaaS, PaaS, or SaaS:
| Responsibility | On-Premises | IaaS | PaaS | SaaS |
|---|---|---|---|---|
| Physical datacenter & network | Customer | Provider | Provider | Provider |
| Physical hosts / servers | Customer | Provider | Provider | Provider |
| Operating system | Customer | Customer | Provider | Provider |
| Network controls | Customer | Customer | Shared | Provider |
| Applications | Customer | Customer | Customer | Provider |
| Identity & access | Customer | Customer | Shared | Shared |
| Data & information | Customer | Customer | Customer | Customer |
| Devices (endpoints) | Customer | Customer | Customer | Customer |
What the customer always owns: data, identity/access, and the devices that connect to cloud services.
What the provider always owns: the physical datacenter, physical network, and physical hosts.
Cloud Deployment Models
| Model | Description | Key Use Cases |
|---|---|---|
| Public cloud | Built, controlled, and maintained by a third-party provider; resources available to any paying customer | Startups, dev/test environments, globally scaled apps |
| Private cloud | Dedicated environment used by a single organization; hosted on-premises or at a third-party facility | Strict regulatory requirements, sensitive data, legacy apps |
| Hybrid cloud | Combines public and private clouds in an interconnected environment | Burst capacity, regulated workloads needing cloud agility, gradual migrations |
| Multicloud | Uses two or more public cloud providers simultaneously | Vendor risk diversification, best-of-breed service selection |
Consumption-Based Model & Cloud Pricing
Traditional IT relies on Capital expenditure (CapEx)Up-front spending on physical infrastructure — servers, networking hardware, datacenter space — the traditional IT model., requiring large upfront purchases of hardware. Cloud computing uses an Operational expenditure (OpEx)Ongoing spending on services over time, billed as consumed. Cloud computing is an OpEx model. model instead — you pay for services as you consume them, with no idle capacity costs.
Pay-as-you-go is the standard cloud pricing pattern:
- No upfront hardware costs
- No idle capacity — you stop paying when you stop using
- Add resources when demand increases, release them when it drops
- Aligns spend to actual business demand
Serverless computingA model where the cloud provider manages all infrastructure provisioning, and customers are billed only for actual code execution time — not for reserved idle capacity. takes this further — you write code and pay only for actual execution time, with no servers to provision or manage.
Azure Arc & Azure VMware Solution
- Azure Arc extends Azure management to on-premises, multicloud, and edge environments — unifying governance across all clouds.
- Azure VMware Solution lets organizations running VMware in private datacenters migrate workloads to Azure without re-architecting.
Shared Responsibility — Layer by Layer
The shared responsibility model is best understood as a sliding scale. As you move from IaaS → PaaS → SaaS, the provider takes on progressively more responsibility, and the customer's obligations narrow toward data and identity.
| Layer | IaaS Owner | PaaS Owner | SaaS Owner |
|---|---|---|---|
| Physical datacenter | Provider | Provider | Provider |
| Physical hosts | Provider | Provider | Provider |
| Operating system | Customer | Provider | Provider |
| Middleware / runtime | Customer | Provider | Provider |
| Applications | Customer | Customer | Provider |
| Identity & access | Customer | Shared | Shared |
| Data | Customer | Customer | Customer |
Data and identity are always customer-owned — regardless of service model.
Cloud Deployment Models — Trade-offs
| Dimension | Public | Private | Hybrid | Multicloud |
|---|---|---|---|---|
| CapEx | None | High | Moderate | None |
| Control | Low | High | Medium | Low |
| Scalability | Very high | Limited | High | Very high |
| Complexity | Low | Medium | High | Highest |
| Regulatory fit | Moderate | Best | Good | Moderate |
Hybrid cloud is the most flexible but adds network complexity, latency considerations, and dual-platform management overhead.
Multicloud (two or more public providers) is specifically NOT the same as hybrid cloud — hybrid requires a private cloud component.
CapEx vs. OpEx — Cloud Positioning
| Attribute | CapEx (Traditional IT) | OpEx (Cloud) |
|---|---|---|
| Payment timing | Upfront | Ongoing (as used) |
| Asset ownership | Customer | Provider |
| Scaling | Plan months ahead | Scale in minutes |
| Idle cost | High (hardware still runs) | Zero (release when done) |
| Risk | Customer bears hardware risk | Provider absorbs it |
Cloud's OpEx model enables cost elasticity — you match expenditure to real demand, not projected peak capacity.
Explore Cloud Pricing and the Azure Portal
Step 1 — Open the Azure Pricing Calculator
- Navigate to azure.microsoft.com/pricing/calculator (no sign-in required).
- Search for Virtual Machines and add one to the estimate.
- Change the region (e.g., East US → West Europe) and observe the price difference — this demonstrates the geography factor that drives Azure costs.
- Switch the pricing model from Pay as you go to 1 year reserved and note the discount.
Step 2 — View Cost Management + Billing
- Sign in to portal.azure.com.
- Search for Cost Management + Billing in the top search bar.
- Open Cost Management → Cost analysis and review the default cost breakdown by service.
- Observe the Subscription scope — each subscription is a billing boundary.
Step 3 — Explore Azure Arc (awareness)
- In the Azure portal search bar, type Azure Arc and open the service.
- Browse Infrastructure → Servers to see where non-Azure resources would appear once connected.
- Note that Arc projects on-premises and multicloud resources into Azure for unified management.
AZ-900 Exam Focus
Exam Trap
"Private cloud means more secure than public" — Not automatically. Private cloud gives more control, but security depends on implementation quality. Public cloud providers invest heavily in security at scale. The exam does not position private cloud as inherently more secure.
Exam Trap
"Hybrid cloud is just two clouds connected" — The exam defines hybrid as a specific combination of public + private cloud, not two public clouds (that is multicloud). Know the distinction precisely.
Exam Trap
"The customer is never responsible for data in SaaS" — Wrong. Data and identity are always the customer's responsibility, regardless of service type. This is a very common exam trap.
Exam Trap
"Serverless means no servers exist" — Servers absolutely exist; the customer simply does not manage or provision them. Billing is per execution, not per reserved instance.
Exam Tip
CapEx vs. OpEx — The exam consistently frames cloud's consumption-based model as an OpEx benefit for on-demand, variable workloads. Neither model is universally better; the exam tests whether you can recognize the distinction and map it to cloud scenarios.
Must Memorize
Customer always responsible for: Data and information · Identity and access · Devices (endpoints)
Provider always responsible for: Physical datacenter · Physical network · Physical hosts
Question — click to flip
Q: What is cloud computing?
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Q: What three things is the customer ALWAYS responsible for, regardless of IaaS/PaaS/SaaS?
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Q: What is the difference between hybrid cloud and multicloud?
Question — click to flip
Q: What is the difference between CapEx and OpEx in cloud computing?
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Q: What does serverless billing charge for?
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Q: Which cloud deployment model offers the most flexibility for choosing where each workload runs?