Sep 12, 2023
Factors that affect costs – Azure Cost Planning and Management

Factors that affect costs

Each Azure consumption (usage)-based service has one or more usage meters that define the price rate and unit of cost. Depending on the service, there will be different units of costs.

Billing is performed monthly for each subscription based on resource consumption that’s collected from individual meters for that subscription. This means that every month, you may receive a different invoice based on a different set of costs incurred; maybe you consumed more on one resources meter, less on another, and created new resources that created costs against another meter.

The following are primary factors that can affect costs:

  • Purchasing model: The costs for resources may differ, depending on your purchase model. You can either purchase your Azure directly from Microsoft or through a Cloud Solution Provider (CSP): https://azure.microsoft.com/pricing/purchase-options.
  • Resource type: The costs are specific to your resources; each resource has a billing meter and cost unit. For example, data storage and data transfer will have a unit of billing of GB/month, a VM or Azure SQL database will have a unit of billing of 1 hour, and a premium SSD managed disk will have a unit of billing of 1/month. Storage accounts can charge for any read and write operations unless you’re using Premium, in which case these charges are not applicable. It is important to understand the billing units for each resource you create.
  • Location: The costs will vary between Azure regions.
  • Usage period: Some resources, such as VMs, can be shut down (de-allocated) to prevent running costs; two identical VMs running for different running hours will have different costs. You would continue to pay for storage costs, but you wouldn’t pay for data transfer costs while the VM is not passing network traffic. It is also worth noting that services such as Azure AD Domain Services, Azure Bastion, and the Azure VPN gateway service, once created, will still be billed even if they are not used; the only way to prevent costs for these services is to delete them.
  • Network traffic: Ingress data transfer (data entering or incoming) for an Azure Region or between resources within the same region is always free, but egress data transfer (data leaving or outgoing) from a region is billed at a per-GB unit; this is irrespective of the fact that this is internet traffic or that the region is using a VPN or ExpressRoute circuit.

Note that some resource types are free and have no billing meter or cost implications. The following are some examples of resources that can be created or enabled with no costs. Likewise, removing any of these will not reduce your costs or the invoice you receive:

  • User accounts or groups
  • Resource groups
  • Virtual networks
  • Virtual network peering
  • Network interfaces
  • Network security groups
  • Availability sets

It is important to understand what resources have cost implications and what resources don’t. In this section, we looked at factors that affect costs. In the next section, we’ll look at how to reduce costs.

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