Cloud computing reduces capital expenditures for businesses by offering a model where resources can be accessed on a pay-as-you-go basis. This eliminates the need for significant upfront investments in hardware and software, enabling organizations to allocate funds to other essential areas. Additionally, cloud services allow businesses to scale their IT resources according to demand, ensuring they only pay for what they use. This flexibility reduces financial risks associated with over-provisioning and supports cost-effective operations. By minimizing the total cost of ownership, businesses can enhance their financial efficiency.