AZ-900 Cloud Concepts — Domain 1 Study Notes 2026
Domain 1 of the AZ-900 Microsoft Azure Fundamentals exam covers Cloud Concepts, accounting for 25-30% of all exam questions. This study guide covers every testable sub-topic: cloud computing definitions, the shared responsibility model, IaaS/PaaS/SaaS service types, public/private/hybrid deployment models, and the seven cloud benefits Microsoft tests most often.
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.
| Responsibility | IaaS | PaaS | SaaS |
|---|
| Physical datacenter, network, hosts | Azure | Azure | Azure |
| Operating System | Customer | Azure | Azure |
| Network Controls | Customer | Shared | Azure |
| Applications | Customer | Customer | Azure |
| Data & Identities | Customer | Customer | Customer |
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.
Define cloud computing using the Microsoft definition (delivery of computing services over the internet, consumption-based) Distinguish IaaS, PaaS, and SaaS — know at least two Azure examples for each service type Draw the shared responsibility model table from memory: what Azure always owns (physical), what customer always owns (data/identities) Explain public, private, and hybrid cloud deployment models including one real-world use case for each List all 7 cloud benefit terms (high availability, scalability, elasticity, reliability, predictability, security, manageability) and define each precisely Explain the difference between vertical scaling (scale up) and horizontal scaling (scale out) with an Azure example Articulate the CapEx to OpEx shift and why the consumption-based model benefits organizations Complete at least one timed AZ-900 practice test and review every Domain 1 question you missed Pros
- Validates your knowledge and skills objectively
- Increases job market competitiveness
- Provides structured learning goals
- Networking opportunities with other certified professionals
Cons
- Study materials can be expensive
- Exam anxiety can affect performance
- Requires dedicated preparation time
- Retake fees apply if you don't pass
What percentage of the AZ-900 exam covers Cloud Concepts?
Cloud Concepts (Domain 1) makes up 25-30% of the AZ-900 exam. It is the largest single domain by weight, which means roughly one-quarter to one-third of your exam questions will come from this domain. Mastering IaaS/PaaS/SaaS definitions, the shared responsibility model, deployment models, and cloud benefits gives you a strong foundation for the rest of the exam.
What is the shared responsibility model in Azure?
The shared responsibility model defines which security and operational tasks belong to Microsoft Azure and which belong to the customer. Azure always handles the physical datacenter, network, and host infrastructure. The customer always handles their own data and user identities. What sits in between (OS, network controls, applications) shifts based on service type: in IaaS the customer handles more; in SaaS Azure handles more. This model is explicitly tested on the AZ-900.
What is the difference between scalability and elasticity in cloud computing?
Scalability is the ability to increase resources to handle greater demand — it refers to the capacity to grow. Elasticity is the ability to automatically scale up when demand rises and scale down when demand falls, preventing resource waste. Elasticity implies automation and dynamic response to workload changes, while scalability describes the upper-bound capability. Both terms appear independently on AZ-900 exam questions, so know both definitions.
What is the difference between IaaS, PaaS, and SaaS?
IaaS (Infrastructure as a Service) gives you virtualized compute, storage, and networking — you manage the OS and everything above it. PaaS (Platform as a Service) adds OS and runtime management by the provider — you manage only your application and data. SaaS (Software as a Service) delivers a complete, ready-to-use application — you manage only data and user access. Azure examples: IaaS = Azure Virtual Machines; PaaS = Azure App Service or Azure SQL Database; SaaS = Microsoft 365 or Dynamics 365.
What is the consumption-based model and why does it matter for AZ-900?
The consumption-based model means you pay only for the cloud resources you actually use — no upfront hardware purchases, no unused capacity costs. This is the economic foundation of cloud computing and directly enables the shift from CapEx (capital expenditure, buying hardware) to OpEx (operational expenditure, ongoing service fees). On the AZ-900, questions about cost predictability, pay-as-you-go pricing, and why organizations adopt cloud all point back to the consumption-based model.
What are the three cloud deployment models on the AZ-900?
The three deployment models are: (1) Public cloud — resources owned and operated by a third-party provider like Azure, shared infrastructure, no CapEx. (2) Private cloud — dedicated infrastructure for one organization, on-premises or hosted, maximum control. (3) Hybrid cloud — combination of public and private, connected with orchestration, offering flexibility and compliance for regulated data while allowing public cloud scalability. The AZ-900 tests the trade-offs and use cases for each model.