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Azure Cloud: Understanding the costs

Updated: Jan 18, 2022

Almost everything in the cloud costs money (regardless of the cloud provider), so it will have its own cost whenever you create a new resource or consume a service. Therefore you must have the ability to understand and, even more important, to predict the future billing for your business.

There are a few pricing models:

  • Per Resource (i.e., Virtual Machine, Container).

  • Reservations are used for organizations that want to pay all costs up-front for the resource with the commitment to use for a certain amount of time; for example, we may commit to use ten virtual machines for five years, and for that case, we will gain a discount.

  • Per consumption (i.e., Function Apps) means that you will only pay for what is being used (no billing on the creation/resource itself).

Regardless of the pricing model, you will use, there is one rule of thumb: ALWAYS check resources cost before provisioning. Also, make sure to seek more cost-effective alternatives. The prime way pf figuring out how much a service is going to cost is using the "Azure Calculator" (Guess what, it is free!), which is available at this address:

As you can see, the calculator page contains all the main categories of services available for us, so we can click the resource we're interested in, fill in some parameters and decide if the costs are good for us (or should we seek other alternatives).

let's figure out the costs for the use of a single Virtual machine:

Press the "Virtual Machine"

Default Costs:

Now change the operating system to "Linux" instead of "Windows," the cost will drop to:

Now let us assume that we need more CPU's on the VM; let us say eight instead of 2 (Default), so now the costs will be jumping to the roof:

But wait, we can save some costs by using the reservation pricing model, so when using it, the fees will reduce by 61%:

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