Azure Pricing Calculator: 10 Smart Ways to Save Cloud Costs

In this article, You learn the Smart Ways to Reduce Cloud Expenses using Azure Pricing Calculator with several cost optimization techniques.
The global cloud computing market is expected to grow at a compound annual growth rate (CAGR) of 16.8% from 2023 to 2030, doubling every 4 years. Cloud’s growth will drive its adoption by millions of new global businesses. The significant concern surrounding cloud expenses often arises when considering the utilization of cloud services or migrating existing infrastructure. We can reduce these expenses in Azure Cloud using the Microsoft Azure Pricing Calculator.
As per Expert Reports –

The global cloud computing market is expected to be worth $2.28 trillion by 2030. This is a significant increase from the current market value of $600 billion.

There are different Cloud pricing models, such as pay-as-you-go, subscription, reserved instances, and spot instances, that offer different levels of flexibility and cost savings. Cloud cost management tools can help businesses choose the best pricing model for their needs, monitor and control their cloud spending, and implement cost optimization strategies.

What is the Azure Pricing Calculator?

The Azure Pricing Calculator is a tool that helps you estimate the cost of using Azure services based on your expected usage and configuration. You can select the services you plan to use, specify the region, tier, and other details, and then calculate the estimated monthly cost.
You can also compare different pricing models to find the best option for your budget and needs.

Azure Cost Price Calculator provides several benefits:

• It allows you to see all Azure products and services, with a short description and a link to a product page.
• You can customize the services you wish to include per your storage requirements, resource consumption, performance expectations, and budget.
• It helps you compare costs across different pricing models, such as pay-as-you-go, subscription, reserved instances, and spot instances.
• It generates detailed cost reports and estimates for your expected monthly or hourly usage.
• It shows your negotiated or discounted prices when you log in with your Azure account.

Azure Price Structure

To calculate the cost, you need to consider the following aspects that affect the price of Azure services:

• Resource Type: The specific Azure service or feature you use, such as virtual machines, storage, databases, etc.
• Resource usage and consumption: The amount of resources that you consume, such as CPU time, memory, disk space, network bandwidth, etc. Some services are billed based on how much you use them, such as the number of hours, transactions, requests, or operations.
• Resource Location: The geographic region where your resources are deployed, such as US East, Europe West, Asia Pacific, etc.
• Resource SKU or tier: The configuration and performance options that you choose for your resources, such as size, tier, availability, redundancy, etc.
• Billing Model: Azure offers different ways to pay for your services, such as pay-as-you-go, subscription, reserved instances, and spot instances. Each option has different benefits and trade-offs, such as flexibility, cost savings, or availability.
  • Pay-as-you-go: This pricing model is ideal for businesses with unpredictable workloads or for testing new services and applications. Businesses are charged only for the resources they consume, without any upfront commitment or termination fees.
  • Reserved Instances: This pricing model is ideal for businesses with predictable workloads or for long-term projects. Businesses can reserve instances of certain Azure services for a period of one or three years, and get significant discounts compared to pay-as-you-go prices.
  • Hybrid Benefit: This pricing model is ideal for businesses that have existing Windows Server and SQL Server licenses with Software Assurance. Businesses can use their licenses to run Azure services and save up to 85% on license costs.
  • Spot Instances: This pricing model is ideal for businesses that have flexible and interruptible workloads. Businesses can bid for unused Azure capacity and get up to 90% discounts compared to pay-as-you-go prices, but they may lose the instances at any time if the demand increases.

How to use the Azure Cost Calculator?

You can follow these steps to use Azure cost management and billing.

• Go to the Azure Cost Calculator page.

• Log in with your Azure account to see your negotiated or discounted prices, or use the default prices if you don’t have an account.
• Search for or browse the Azure services that you want to use and select the product tiles to add them to your estimate.

• For each service, adjust the region, tier, size, and usage parameters to match your expected consumption and configuration.

• View the estimation summary at the bottom of the page to see the total monthly or hourly cost for your selected services.

• You can also use the estimation tools to export, share, save your estimate, or switch to the advanced calculator mode for more options and features.
• The Azure Support option is the choice of the level of support that you need from Microsoft Azure, depending on your business needs and budget. Azure offers different support plans, such as Basic, Developer, Standard, Professional Direct, and Enterprise.

• Each plan has different features, benefits, and costs, such as the initial response time, the number of support requests, the technical scope, and the access to advisory services.
• You can change the currency in the Azure pricing calculator according to your Country.

Cost Optimization Techniques

Apply cost optimization guidance in your architecture to sustain and improve your return on investment (ROI). Optimize usage and rate utilization while keeping a cost-efficient mindset.

1. Design patterns for cost optimization

Understand your business requirement, gather the data and design patterns that support reliability, security, operational excellence and performance efficiency.

2. Getting the best rates from providers

Select between consumption (pay-as-you-go) and commitment-based billing models. To take advantage of Azure Hybrid Benefit, you need to ensure that your licenses are eligible and meet the requirements.

3. Develop cost-management discipline

Leverage cost meter, A tracking mechanism that you use to calculate the usage of resources over time. It tracks usage, such as compute hours, data transfer, and input-output operations.

4. Evaluate Application feature value

Analysis of the Business goals, customer needs, user experience and improving usability or productivity, competitive advantage in the market are also significant points to understand.

5. Determine Billing Factors

Determining application services Runtime, Data transfer refers to the movement of data into and out of a resource, Specialized services, Virtual CPUs (vCPUs), and Uptime guarantees are also key factors to consider.

6. Determine Billing Increments

• Time: Resources are billed based on the duration of usage, such as per second, hour, or day.
• Per request:  Some resources, especially those in serverless or event-driven architectures, charge you based on how many times they are triggered. Reduce the number of unnecessary invocations and improve the design of applications to lower the number of chargeable invocations.
• Data transfer increments: Data transfer costs are measured in increments, such as gigabytes (GB) or terabytes (TB).
• Storage increments: Storage costs are usually calculated in increments, such as GB or TB..

7. Collect and Review Cost Data

Gather cost data to visualise a realistic picture of your workload and ensure spending is optimized. Data collection includes all indicators of cost optimization, like billing data, resource utilization, and usage patterns. Collected data allows you to understand the cost of architecture decisions and business drivers like costs per user or unit.

8. Recommendations for setting spending guardrails

 Spending guardrails are calculated to control and manage costs within a specified budget. They help prevent unexpected or excessive spending and promote cost-effective utilization of resources

9. Design with a cost-efficiency mindset

• Use reserved instances and savings plans to get discounts on computing services by committing to a certain amount of usage in advance.
• Use spot VMs to run interruptible workloads at a lower price than pay-as-you-go VMs.
• Use Azure Hybrid Benefit and Azure Cost Management to optimize your software licenses and cloud costs.
• Compare the prices of different regions, tiers, and models for the services you use.

10. Create visuals and reports with the Azure Cost Management connector

Creating cost reports: You can use Cost Analysis to make personalized reports that show your actual costs, prepaid costs, patterns, and predictions.

Analyzing cost data:  Microsoft Power BI can assist you with gathering and examining cost data. Power BI offers a complete solution for collecting, examining, and analyzing cost data

Getting the best rates is the practice of finding and securing the most cost-efficient pricing options for cloud and software resources without modifying architecture, resources, or functionality.

Example of Estimate Machine Learning Platform Pricing Model with Azure billing calculator

The Real-Time Enterprise application is using Azure services to create smart machine-learning solutions on a secure platform. This design lets you use data services to assist your machine-learning process with guaranteed security and privacy across machine-learning solutions.

You can calculate the Azure cost estimates as per your infra architecture. You can leverage services as per your business requirements and budget.

Azure Cost estimator and optimization is about looking at ways to reduce unnecessary expenses and improve operational efficiencies. For more information, see Overview of the Cost Optimization Pillar.

Best Practices to Optimize Your Azure Costs

• Shut down unused resources
• Right-size underused resources
• Add an Azure savings plan for computing dynamic workloads
• Reserve instances for consistent workloads
• Take advantage of the Azure Hybrid Benefit
• Configure autoscaling
• Choose the right Azure compute service
• Set up budgets and allocate costs to teams and projects

Happy learning!
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