AZ-900 Cloud Concepts — Domain 1 Study Notes 2026 October

Domain 1 Overview: Cloud Concepts (25-30% of the AZ-900 Exam)

Cloud Concepts is the first and largest domain on the AZ-900 Microsoft Azure Fundamentals exam, accounting for 25-30% of all exam questions. If you skip this domain, you are leaving roughly one-third of the exam to chance.

Domain 1 tests your ability to define what cloud computing is, articulate its core benefits, and distinguish between the major service and deployment models. These are conceptual questions — no hands-on Azure portal work required — which makes them approachable but also surprisingly tricky. Microsoft tests precise vocabulary.

What Is Cloud Computing?

The official Microsoft definition: Cloud computing is the delivery of computing services — including servers, storage, databases, networking, software, analytics, and intelligence — over the internet to offer faster innovation, flexible resources, and economies of scale.

The key phrase is over the internet. Cloud computing replaces on-premises hardware ownership with on-demand access to a shared pool of configurable resources. You pay for what you use (the consumption-based model) rather than purchasing and maintaining physical infrastructure.

For a broader foundation, see the AZ-900 Complete Exam Guide, which covers all five domains in one place.

The Shared Responsibility Model

The shared responsibility model defines who is accountable for what in a cloud environment. Microsoft divides responsibilities between the cloud provider (Microsoft Azure) and the customer. The split depends on the service model.

One rule that never changes: The customer is always responsible for their own data and user identities, regardless of whether they use IaaS, PaaS, or SaaS. Azure is always responsible for the physical hardware and datacenters.

Cloud Deployment Models

The AZ-900 exam tests three deployment models. Know the definitions and the trade-offs:

Public Cloud

Resources are owned and operated by a third-party cloud provider (like Microsoft Azure) and delivered over the internet. Multiple organizations share the same physical infrastructure, though data and workloads remain logically isolated. No CapEx required — you pay only for what you use.

• Pros: No upfront hardware cost, infinite scale on demand, global availability, managed security
• Cons: Less control over physical infrastructure, potential compliance constraints for regulated industries
• Example: Running a web app on Azure App Service — Microsoft owns and operates all the hardware

Private Cloud

Cloud infrastructure is provisioned exclusively for one organization. It can be hosted on-premises in the organization own datacenter or by a third-party provider, but dedicated hardware is not shared with anyone else.

• Pros: Maximum control over hardware and data, meets strict regulatory requirements, customizable security
• Cons: High CapEx, limited scalability compared to public cloud, customer manages everything
• Example: Azure Stack Hub deployed in a company own datacenter

Hybrid Cloud

Combines public and private cloud environments with orchestration between them. Organizations keep sensitive workloads on-premises (private) while bursting to the public cloud for additional capacity or hosting less-sensitive applications publicly.

• Pros: Maximum flexibility, phased cloud migration, compliance + scale
• Cons: Most complex to manage, requires connectivity between environments
• Example: Azure Arc connecting on-premises servers to Azure management plane

For a full domain-by-domain breakdown, the AZ-900 Study Guide 2026 organizes prep by exam weight and covers all domains systematically.

CapEx vs. OpEx: The Economic Shift

One of the most-tested concepts in Domain 1 is the shift from Capital Expenditure (CapEx) to Operational Expenditure (OpEx).

CapEx (Capital Expenditure) is upfront spending on physical infrastructure: servers, racks, cabling, cooling. You pay once, own the asset, and depreciate it over time. You also guess future capacity needs — often over-provisioning (waste) or under-provisioning (bottleneck).

OpEx (Operational Expenditure) is ongoing spending for services consumed — pay-as-you-go. Cloud computing converts most IT spending from CapEx to OpEx. No upfront hardware purchase, no depreciation schedule, and you scale costs directly with usage.

The consumption-based model means you only pay for what you use. Azure meters CPU hours, GB of storage, data egress, API calls — all billed by consumption. This directly enables cost predictability: if usage drops, costs drop automatically.

For a complete walkthrough of exam preparation strategy, read How to Pass the AZ-900 Exam in 2026 — it includes a realistic study timeline and resource list.

You can also supplement your Domain 1 prep with a full AZ-900 Practice Test to identify which cloud concepts need more review before exam day.

Sample AZ-900 Practice Questions

Try these questions from our free AZ-900 practice tests. The correct answer and an explanation follow each question.

1. Which cloud deployment model combines on-premises infrastructure with public cloud resources?

• A. Hybrid cloud
• B. Public cloud
• C. Private cloud
• D. Community cloud

Answer: A. Hybrid cloud

A hybrid cloud connects on-premises (private) infrastructure with public cloud services.

Infrastructure as a Service (IaaS) is the ideal model for migrating existing on-premises workloads, often referred to as 'lift and shift'. [11] It allows the company to rent IT infrastructure—servers and virtual machines (VMs), storage, networks, and operating systems—from a cloud provider on a pay-as-you-go basis, while still managing the OS and applications. [27]

Answer: D. Hybrid Cloud

A hybrid cloud combines a private cloud (or on-premises infrastructure) with a public cloud, allowing data and applications to be shared between them. [9] This model offers organizations greater flexibility and more deployment options, enabling them to keep sensitive data on a private network while using the public cloud for other workloads. [26, 31]

Take the full AZ-900 practice test