In many cases, cloud services can help save a lot of operating IT costs. Usually, businesses allocate a budget on a yearly or fiscal basis. This may or may not work out, depending on market changes or large unplanned increases or decreases in business volume. Since Microsoft is a subscription-based service, it is easy to predict how your business expenditure may increase or decrease based on the number of users for whom you need to purchase licenses. 

Business expenditures typically fall into two categories: Capital Expenditure or Capital Expense (CapEx) and Operational Expenditure or Operational Expense (OpEx). CapEx is an upfront cost, such as purchasing a server, a desktop computer, or a network switch. Capital expenditures are frequently physical items.

OpEx, by contrast, is ongoing or recurring costs, such as maintenance or subscription fees, or other operating costs, such as electricity. MS-900 will have questions about both types of expenditure, so make sure you are familiar with this vocabulary.

In terms of cloud services' cost-effectiveness, consider this: on-premises infrastructure requires purchasing and maintaining capital expenses such as hardware, building space, security systems, and a host of other items. To that, add other operational expenses, such as engineers, consultants, and project managers, that are necessary to support the infrastructure. Organizations frequently experience difficulty determining how much equipment to purchase, especially if their business model has large activity swings. An organization might have to purchase an incredibly expensive and powerful system to ensure they can meet a peak demand or load situation that might only occur once a month or once a quarter, resulting in a system that will likely sit underutilized much of the time.

If you want to fulfill a demanding need with a cloud services model, you can rent capacity from a provider as you need it. With a subscription such as Microsoft 365, if your organization brings on seasonal workers, depending on your license agreement with Microsoft, you may be able to increase or decrease the number of licenses as your headcount changes. You're only paying for what you need.