How can cloud-based solutions improve scalability for businesses?

Cloud-based solutions significantly enhance scalability for businesses primarily by enabling on-demand resource allocation. This flexibility allows organizations to adjust their computing resources—such as storage, processing power, and software capabilities—based on current needs without the delays associated with physical hardware installations or upgrades.

When demand spikes, businesses can quickly scale up their resources to handle increased workloads, ensuring performance stability and efficient operations. Conversely, during periods of low demand, they can scale down, optimizing costs by only paying for the resources they actually use. This agile approach to resource management is fundamental to cloud computing, fostering business growth while maintaining financial and operational efficiency.

The other options do not align with the cloud's scalability benefits. Restricting resource allocation or requiring fixed investments contradicts the core advantage of flexible scaling. Similarly, promoting local server installations is contrary to the cloud model, which thrives on centralized, easily adjustable resources that can be accessed remotely.