AZ-900 – Module 6 – Azure pricing and lifecycle

Let’s dive into the world of Planning and Cost Management in Microsoft Azure. These concepts are vital for anyone looking to make the most of Azure services while keeping an eye on their budget. Whether you’re just starting out or aiming to optimize your Azure spending, let’s explore these fundamental factors and tools.

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Factors Affecting Costs: Imagine Azure as a vast marketplace where you can buy different resources and services. The cost of what you use depends on various factors:

  • Resource Types: Different resources come at different prices.
  • Services: Azure offers a wide range of services, each with its own pricing structure. Using more or fewer services will directly impact your costs.
  • Locations: Azure has data centers all over the world. Where you choose to host your resources can affect costs due to variations in data center pricing.
  • Bandwidth: Data going into and out of Azure can have associated costs, especially if you have high data transfer requirements.
  • Reserved Instances: Azure Reservations allow you to prepay for one-year or three-years of virtual machine or SQL Database compute capacity. Pre-paying will allow you to get a discount on the resources you use. Azure reservations can significantly reduce your virtual machine or SQL database compute costs — up to 72 percent on pay-as-you-go prices with one-year or three-year upfront commitment. Reservations provide a billing discount and don’t affect the runtime state of your virtual machines or SQL databases.
  • Azure Hybrid Use Benefit: If you already have Windows Server or SQL Server licenses in your on-premises deployments, you can use the Azure Hybrid Benefit program to save in Azure. With the Windows Server benefit, each license covers the cost of the OS (up to two virtual machines), and you only pay for base compute costs. You can use existing SQL Server licenses to save up to 55 percent on vCore-based SQL Database options. Options include SQL Server in Azure Virtual Machines and SQL Server Integration Services.

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Pricing Calculator and TCO Calculator
The Pricing Calculator is like a shopping cart for Azure. It helps you estimate the cost of your Azure resources and services before you even start using them. You can experiment with different configurations to find the best fit for your budget.

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The Total Cost of Ownership (TCO) Calculator is for those considering a move to Azure. It helps you compare the cost of running applications on-premises versus in Azure over a specified period. It takes into account factors like hardware, software, and operational costs.

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Service Level Agreements (SLAs)

Think of an SLA as a promise, a commitment made by Microsoft Azure to its customers. Its purpose is to ensure that Azure services are available and performant when you need them. In essence, it guarantees a certain level of reliability.

For example, let’s say you’re running a critical web application on Azure, and you rely on Azure SQL Database to store your data. An SLA assures you that this database will be available and responsive at least 99.99% of the time. If Azure fails to meet this commitment, you might be eligible for service credits or compensation.

  • SLAs are based on individual products and services. 
  • Detailed agreements on the service provided, and any exceptions to the SLA.
  • Free and preview features/services do not offer SLAs.

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SLAs for Azure products and services

  • Performance targets are expressed as uptime and connectivity guarantees.
  • Performance-targets range from 99% to 99.999%.
  • If a service fails to meet the guarantees, a percentage of the monthly service fees can be credited
  • Not all services have an SLA

Actions that affect SLAs

Lower your SLA
– Adding more services
– Choosing free or non-SLA services
Raise your SLA
– Availability Zones
– Redundant systems

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Azure Preview Program

With Azure previews, users can test beta and other pre-release features, products, services, software, and regions to provide feedback.

  • Public Preview: all Azure customers can evaluate the new features
  • Generally available (GA): after public preview is completed, all customers can use the feature, and region availability will vary.

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Azure Cost Management
Azure Cost Management is your financial control center. It helps you track and analyze your Azure spending in real-time. You can set budgets, get cost alerts, and gain insights into where your money is going. It’s like having a dashboard to monitor and optimize your expenses.

For instance, if you notice that your data storage costs are increasing rapidly, you can use Azure Cost Management to identify which resources are causing the spike and take action to reduce it.

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Minimizing costs

Firstly, we must be methodical. Performing cost analyses with tools such as Azure Pricing and Total Cost of Ownership calculators will give us a clear picture of our current spending and where we can make adjustments. For example, by using these tools, we were able to identify that by simply changing the instance types for our non-critical workloads, we could save up to 20% on our monthly bill.

Monitoring is our next line of defense. With Azure Advisor, we gain insights into our usage patterns. Implementing its recommendations can lead to significant savings. Take, for instance, our recent discovery that by scaling down our services during off-peak hours, we reduced costs by 15%.

Utilizing spending limits is a smart move, especially for free trial customers and those with credit-based Azure subscriptions. It’s like setting a budget for your personal finances; it helps you avoid unexpected expenses. An example here is a startup that used Azure’s spending limits to cap their costs while experimenting with different services, ensuring they didn’t overspend.

Azure Reservations and Azure Hybrid Benefit (HUB) are also at our disposal. By committing to certain services, we can receive discounted rates. For instance, one of our departments saved 40% on their virtual machines by reserving capacity for a year in advance.

Choosing low-cost locations and regions for our services can have a surprisingly large impact. Prices can vary depending on the region. We found that by hosting some of our services in an alternate region, the pricing was 10% lower than our local region without any compromise on performance or latency.

Keeping up-to-date with the latest Azure customer and subscription offers is also key. By being proactive, we can take advantage of deals and promotions. Recently, Azure had an offer on storage that we capitalized on, leading to a reduction in our storage costs by 25%.

Finally, applying tags to identify cost owners within our infrastructure ensures accountability. By tagging resources, we can trace back to the teams or projects that are driving costs. A department in our organization was able to reduce its spending by 30% simply because the team became more aware of the resources they were using.

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