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Factors affecting costs

There are six primary factors affecting costs:

Resource Type​

Different types of resources in Azure (like virtual machines, databases, or storage) have specific usage costs that depend on how much you use them.

Services​

The cost and billing periods can vary for different types of Azure customers (like Enterprise, Web Direct, or CSP). It's similar to how different types of memberships or subscriptions might offer different pricing and benefits.

Location​

Costs may vary based on where your Azure resources are located globally.

Bandwidth​

Azure charges for data transfers in and out of its data centers. Inbound data (coming into Azure) is often free, while outbound data (leaving Azure) can vary in cost based on the destination and volume.

Reserved Instances​

By committing to use Azure resources for one or three years, you can get significant discounts compared to pay-as-you-go prices. It's similar to buying in bulk; you pay less per unit by making a long-term commitment.

Azure Hybrid Use Benefit​

If you have existing software licenses with Software Assurance, you can use them on Azure at a reduced cost. This benefit allows you to save money by leveraging licenses you already own for on-premises software.

Pricing Calculator

The Azure Pricing Calculator is indeed a valuable tool for estimating costs. Here's a breakdown of the basic configuration options typically available:

  • Region: This allows you to select the geographic location where your Azure resources will be deployed.
  • Tier: Some Azure products offer different service tiers with varying features and pricing levels.
  • Billing Options: You can choose between pay-as-you-go (PAYG) pricing or Azure Reservations for certain products.
  • Support Options: Azure provides various support plans with different levels of service and response times.
  • Programs and Offers: Azure offers discounts and benefits through various programs like Enterprise Agreements (EA), Cloud Solution Provider (CSP) program, and others.
  • Azure Dev/Test Pricing: Azure provides discounted rates for development and testing environments to help reduce costs during these stages.

Total Cost of Ownership Calculator

The Total Cost of Ownership (TCO) Calculator for Azure is designed to help businesses estimate potential cost savings when migrating from on-premises infrastructure to Azure cloud services.

Azure Cost Management

Azure Cost Management provides several features to help organizations effectively manage and optimize their Azure spending:

  • Reporting (Billing Reports): Azure Cost Management enables detailed reporting on usage and expenditures.
  • Data Enrichment: Cost Management enriches billing data with additional context to make it more meaningful and actionable.
  • Budgets: You can set spending budgets within Azure Cost Management to control and monitor your Azure expenditures.
  • Alerting: Azure Cost Management provides alerting capabilities to proactively notify stakeholders when costs exceed predefined thresholds or budgets.
  • Recommendations: Cost Management offers cost-saving recommendations based on Azure best practices and usage patterns.

Minimizing costs

Perform --> Monitor --> Use --> Use --> Choose --> Keep --> Apply

  • Perform cost analyses. Use the Azure Pricing and TCO calculators.
  • Monitor usage with Azure Advisor. Implement recommendations.
  • Use spending limits. Use via free trial customers and some credit-based Azure subscriptions.
  • Use Azure Reservations and Azure Hybrid Benefit (HUB).
  • Choose low-cost locations and regions.
  • Keep up-to-date with the latest Azure customer and subscription offers.
  • Apply tags to identify cost owners.

Service Level Agreements (SLAs)

Service Level Agreements (SLAs) in Azure outline Microsoft's commitments regarding uptime and connectivity for various products and services.

  • Uptime Commitments: SLAs specify the guaranteed uptime percentage for Azure services.
  • Connectivity: SLAs also cover connectivity guarantees, ensuring that Azure services are accessible and responsive within defined performance metrics.
  • Detailed Service Description: Each SLA provides a detailed description of the service being provided, including its features, performance metrics, and operational characteristics.
  • Exceptions and Exclusions: SLAs typically outline any exceptions or exclusions to the guaranteed uptime and connectivity, such as scheduled maintenance windows or events beyond Microsoft's control (e.g., force majeure events).
  • Non-Covered Services: Free or preview features/services often do not come with SLAs.

SLAs for Azure products and services specify performance targets typically expressed as uptime and connectivity guarantees.

  • Uptime Guarantees: Azure SLAs often guarantee high levels of uptime, ranging from 99% to 99.999% (also known as "five nines"). This percentage indicates the amount of time per month that the service is expected to be operational and accessible.
  • Service Level Credits: If a service fails to meet the uptime or connectivity guarantees outlined in its SLA, Azure typically offers service level credits. These credits compensate customers for the downtime experienced beyond the agreed-upon thresholds. The amount credited is usually a percentage of the monthly service fees, proportional to the duration and severity of the outage.

Actions and design decisions can indeed impact the Service Level Agreements (SLAs) for Azure services.

Lowering Your SLA​

  • Choosing Lower Uptime Guarantees: Opting for services with lower uptime guarantees, such as 99% instead of 99.99%, can lower your SLA expectations. This might be acceptable for non-critical applications where occasional downtime is tolerable.
  • Using Non-SLA Services: Free or preview Azure services typically do not come with SLAs. Opting for these services reduces your reliance on guaranteed uptime and connectivity.

Raising Your SLA​

  • Selecting Higher Uptime Guarantees: Choosing services with higher uptime guarantees, such as 99.99% or higher, raises your SLA expectations. This is crucial for critical applications that require maximum uptime and performance.
  • Implementing Redundancy and Availability Zones: Designing your architecture to utilize Azure's Availability Zones and implementing redundant systems can improve resilience and raise your SLA. Availability Zones offer physically separate locations within an Azure region, ensuring redundancy against data center failures. Your SLA goals should align closely with your business goals and application requirements. Critical applications may warrant higher SLAs to minimize downtime and ensure consistent performance.

Azure Preview Program

The Azure Preview Program allows users to test beta and pre-release features, products, services, software, and regions before they are generally available to all customers.

  • Public Preview: During the Public Preview phase, all Azure customers can access and evaluate new features. This phase allows Microsoft to gather feedback from a broader user base, helping to identify and address issues before the feature becomes generally available (GA).
  • Generally Available (GA): After the Public Preview phase concludes and Microsoft incorporates feedback and makes necessary adjustments, the feature or service transitions to Generally Available. At this stage, it is fully released for use by all Azure customers, subject to regional availability.
  • Testing and Feedback: Users participating in the Preview Program can test new capabilities in real-world scenarios and provide feedback directly to Microsoft. This feedback loop is crucial for improving the quality and usability of Azure services before their full release.
  • Regional Availability: It's important to note that the availability of features and services may vary by region even after they become generally available. Microsoft gradually rolls out new features across different Azure regions to ensure reliability and performance.

Monitoring service and feature updates

To monitor Azure service and feature updates effectively, Azure provides several resources and tools:

  • Azure Updates: Azure Updates is the primary resource for information about Azure products, services, features, roadmaps, and availability changes.
  • Details and Status: Azure Updates provides detailed information about each update, including its status (such as preview, general availability, or rollout phases), release notes, and any associated documentation or guides.
  • Browse and Search: You can browse through updates based on categories like Azure regions, services, or product families. Additionally, a search feature allows you to find specific updates by keywords or topics of interest.
  • Subscription Options:
    • RSS Notifications: Azure Updates offers RSS feeds that you can subscribe to for receiving notifications about new updates.
    • Email Notifications: You can also subscribe to email notifications through the Azure portal to receive updates and announcements directly in your inbox.