Medium1 markMultiple Choice
Subtask 1.1: Business RequirementsTCOROIBusiness CaseFinOps

GCP PCA · Question 21 · Business Requirements

A financial services company is evaluating a migration to Google Cloud. The CFO wants to understand the Total Cost of Ownership (TCO) and the expected Return on Investment (ROI) compared to their current on-premises data center. Which approach should you take to provide the most accurate financial assessment?

Answer options:

A.

Compare the cost of a physical server to the on-demand hourly rate of a Compute Engine VM with identical CPU and RAM.

B.

Use the Google Cloud Pricing Calculator to estimate cloud costs, factor in the reduction of on-premises CapEx and operational overhead, and calculate the payback period.

C.

Advise the CFO that cloud is always cheaper and provide a generic industry whitepaper on cloud ROI.

D.

Calculate the cost of migrating all data using Transfer Appliance and divide it by the monthly cloud spend.

How to approach this question

Understand that TCO involves more than just hardware costs; it includes operational overhead, facilities, and CapEx vs OpEx shifts.

Full Answer

B.Use the Google Cloud Pricing Calculator to estimate cloud costs, factor in the reduction of on-premises CapEx and operational overhead, and calculate the payback period.✓ Correct
When calculating Total Cost of Ownership (TCO) for a cloud migration, it is critical to look beyond a simple 1:1 hardware comparison. A comprehensive TCO analysis includes the cost of the GCP resources (optimized with discounts), minus the savings from retiring on-premises hardware (CapEx), data center facilities (power, cooling, rent), and the operational overhead of maintaining physical infrastructure.

Common mistakes

Comparing physical server costs directly to on-demand VM costs (Option A) is a common mistake that ignores cloud discounts and on-prem operational costs.

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