When you move from CapEx to OpEx, you are saving a lot of money on infrastructure; however, do you know you can still get a big bill from Azure of you do not keep an eye on it?
That OpEx cost can be impacted by many factors. Some of the impacting factors are:
Let’s understand these factors in detail now.
Resource type
Several factors influence the cost of Azure resources. The type of resources you choose, the specific settings for these resources, and the Azure region where they are deployed all play a significant role in determining the overall cost. When you provision an Azure resource, Azure creates metered instances for that resource. These meters track the usage of the resources and generate usage records, which are then used to calculate your bill.
Examples
Virtual Machine (VM):
For virtual machines, there are additional considerations that affect the cost. You need to consider licensing costs for the operating system or other software that will run on the VM, the type and number of processors and cores, the type of attached storage, and the network interface. Similar to storage accounts, provisioning the same virtual machine in different Azure regions can lead to different costs due to regional pricing differences.
Consumption
The pay-as-you-go model is a fundamental principle in cloud computing, including Azure. Under this model, you only pay for the resources you use during a billing cycle. This means that if you consume more compute power, storage, or other resources in a given cycle, your bill will be higher. Conversely, if you use fewer resources, your costs will be lower. This straightforward pricing mechanism provides maximum flexibility, allowing you to scale your usage up or down based on your immediate needs without committing to long-term contracts or predefined resource limits.
In addition to the pay-as-you-go model, Azure offers the option to commit to using a certain amount of cloud resources in advance, which can result in substantial cost savings. By opting for reserved instances, you can receive significant discounts on these “reserved” resources. Many Azure services, such as databases, compute resources, and storage solutions, provide this option. Committing to a specific level of usage can yield discounts of up to 72 percent, making it an attractive option for businesses with predictable workloads.
When you reserve capacity, you agree to use and pay for a specified amount of Azure resources over a set period, typically one or three years. This commitment allows you to benefit from lower rates compared to on-demand pricing. Reserved capacity is ideal for stable, consistent workloads where you can predict your resource needs over the reservation period. By locking in these resources at a discounted rate, you achieve cost predictability and can significantly reduce your overall cloud expenditure.
Even with reserved capacity, Azure retains the flexibility of the pay-as-you-go model. If you experience a sudden increase in demand that exceeds your reserved capacity, you can still utilize additional resources on a pay-as-you-go basis. This hybrid approach ensures that you can handle unexpected surges in usage without disruption while continuing to benefit from the cost savings of your reserved capacity.
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Maintenance
The flexibility of the cloud allows you to quickly adjust resources based on demand. To manage this effectively, using resource groups can help keep all your resources organised. It is crucial to maintain your cloud environment to control costs.
For example, when you provision a virtual machine (VM), additional resources such as storage and networking are also provisioned. If you deprovision the VM, these additional resources may not always be deprovisioned at the same time, either intentionally or unintentionally. By regularly monitoring your resources and ensuring that you are not keeping resources that are no longer needed, you can help manage and reduce cloud costs.
Geography
When provisioning resources in Azure, you must define a region where the resource will be deployed. Azure’s infrastructure is globally distributed, allowing you to deploy services either centrally, closest to your customers, or at various other locations as needed. This global distribution comes with regional pricing differences. The cost of power, labor, taxes, and other fees can vary significantly depending on the location. As a result, the cost of deploying Azure resources can differ based on the region.
Additionally, network traffic costs are affected by geography. For instance, it is less expensive to transfer data within Europe compared to moving data from Europe to Asia or South America. This geographic variance in pricing means that selecting the right region for deploying your resources is essential for optimising costs and performance.
Network Traffic
Billing zones play a crucial role in determining the cost of some Azure services, particularly related to network traffic.
Bandwidth refers to the data moving in and out of Azure datacenters. Some inbound data transfers (data going into Azure datacenters) are free. However, for outbound data transfers (data leaving Azure datacenters), the pricing is based on billing zones.
A zone is a geographical grouping of Azure regions for billing purposes. The cost of data transfer varies depending on these zones. For detailed information on pricing for data ingress (incoming data), egress (outgoing data), and transfers within Azure, you can refer to the bandwidth pricing page.
Subscription Type
The type of Azure subscription you have can also affect your costs, as some subscription types include usage allowances.
For example, an Azure free trial subscription provides access to several Azure products for free for the first 12 months. Additionally, it includes a credit amount to spend within the first 30 days of signing up. The free trial includes access to over 25 products that remain free as long as you stay within certain usage limits and availability in the selected regions.
Azure Marketplace
Azure Marketplace offers a platform where you can purchase Azure-based solutions and services from third-party vendors. This marketplace includes a variety of products, such as servers with preinstalled and configured software, managed network firewall appliances, or connectors to third-party backup services.
When you buy products through Azure Marketplace, you may incur costs not only for the Azure services you’re using but also for the services or expertise provided by the third-party vendor. Each vendor sets its billing structure, which can vary.
All solutions available in Azure Marketplace are certified and compliant with Azure policies and standards. The certification policies can differ based on the type of service or solution and the specific Azure service involved. For more detailed information, you can refer to the commercial marketplace certification policies page.
