Azure Pricing

Pricing Structure

  • On Premises – utilization is well below 100%. No monthly costs, large upfront cost, pay for utilities.
  • Azure – you don’t own the hardware. Pay for hours you use. Pay more for resources. Service payment is tiered, Location can affect price.


  • All resources belong to a subscription.
  • Multiple Subscriptions – any azure account can have multiple subscriptions. Useful for organizing who pays for what.
  • Billing Admin – one or more users can be a “billing admin”, which manages anything to do with billing and invoicing on Azure. Ensures separation of responsibility.
  • Billing Cycle – is either 30 or 90 days.
  • Offer type – is a type of subscription. Well known is enterprise license agreement, Pay as you Go, Student Account, Microsoft Valued Professional, Bizspark for startups
  • Management Groups – take action across subscriptions, useful in large organizations. Organize policies/access/compliance in bulk.

Cost Management

  • Free Accounts – range of benefits (12 mo free access, 750 hours of compute, 250 gb of SQL, 500gb on Cosmos DB)
  • Azure Cost Management – azure portal, reports & recommendations, optimize your current resources to save money and monitor any AWS charges too
  • Spot VMs – deep discounts. Save up to 90% of the price. You aren’t guaranteed they’ll live forever. Don’t put any critical production processes on Spot VMs. Can be evicted at any time, can use with scale sets, can set a max price for the Spot VM.

Pricing Factors

  • Resource Size – will have different pricing. A more powerful virtual machine will cost more.
  • Resource Type – this is a very big difference in the amount of hardware resources needed for various types of resources, as well as complexity
  • Location – different azure locations have differnet prices for services. Exchange rates, labor costs and more have an influence on the price.
  • Bandwidth – your services
  • Billing Zones – billing zones 1-3, any ingress is free, any egress data is billed when transmitting across billing zones.
  • Monthly Cost estimate from the Pricing Calculator, can export as a spreadsheet
  • Total Cost of Ownership Calculator – estimate total savings over a period of time by using Azure, estimate over a period of 5 years. Comprehensive reports to share with stakeholders.

Spending Limits

  • Some Azure accounts with monthly credits to use will have default spending limits. When credits are used, the limit kicks in.
  • When the credits are gone, either remove the limit entirely or leave it in effect
  • No Spending Limit – pay as you go have no spending limit
  • Some accounts have a quota, ensure service level. For some services, you can ask for a quota change.
  • Tags – non functional labels, you can attach to resource or resource group, use as many tags as you wish. Protect sensitive data, make bulk processing and updating easier, filter resources per project, create unambiguous description, tag name, and potential values.
  • Using a pay-as-you-go model is common but most expensive – lots of money can be saved by using reserved instances. Can be up to 70% off price.
  • Capacity for 1 or 3 year commitment. E.g. 80% on Azure SQL, 65% on Synapse Analytics, 65% on Cosmos DB, 55% on Redis Cache
  • Existing Licenses can be used for Windows, SQL server
  • Advisor portal – gives you best practices advice in general through recommendations

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