Option B is correct because the requirement is to retain a very large dataset indefinitely and analyze it from Amazon Redshift in the most cost-effective way. Amazon Redshift Spectrum allows Redshift to query data directly in Amazon S3 without loading all of the data into Redshift-managed storage. That reduces warehouse storage cost for long-term retained data. AWS documentation also recommends using Apache Parquet for Spectrum because Parquet is a columnar format, which allows Redshift Spectrum to read only the columns needed instead of scanning entire text files. This improves performance and lowers query cost.

Option A and D are less cost-effective because auto-copy loads data into the Redshift cluster, which means the company pays to store all historical data in Redshift even though the requirement is indefinite retention of a large volume of IoT data. Option C is worse than B because JSON is a row-oriented text format, and AWS guidance says columnar formats such as Parquet or ORC are preferred for Redshift Spectrum for better scan efficiency and lower cost.