Azure Pricing: The Complete Guide

How Much Does Azure Cost Per Month?

Microsoft Azure is a cloud provider offering a diverse range of services, including storage, networking, compute, and analytics. Azure services can be consumed in the Azure public cloud, on-premises, and in hybrid implementations. 

Learn more in our detailed guide to azure storage pricing.

The table below shows the minimal price of core Azure services, and how much you can expect to pay in an example scenario.

Learn more in our detailed guide to azure vm pricing.

Azure pricing depends on many factors, including the type of service, the capacity required, the location, and the level of management. Azure offers a free tier, which provides free use of certain services for the first 12 months, and free forever usage of specific services. 

The majority of Azure services can be purchased under the “pay as you go” pricing model, which charges users based on actual usage. Additionally, Azure offers significant discounts for reserved instances (which require commitment of 1 or 3 years), and spot instances (virtual machines from Azure’s spare capacity, which can be terminated at short notice).

Learn more in our detailed guide to azure reserved instances.

This is part of an extensive series of guides about FinOps.

In this article, you will learn:

• Azure Free Tier
• Azure Pricing Models
• Azure Savings Options
• Azure Virtual Machine (VM) Pricing
• Azure Storage Pricing
• Azure Functions Pricing
• Azure Networking Pricing
• Azure Cost Management Tools
• Azure Pricing Optimization with Spot.io

Azure Free Tier

Azure offers a free tier that lets companies use a variety of services free for 12 months (with a limited allowance), provides a credit for additional services in the first 30 days, and provides several services for free on an ongoing basis.

12 Months Free Use

Azure provides the following services free for the first 12 months after creating an Azure account. Each service has a usage limit—for example, you can use a Windows Virtual Machine for 750 hours.

Learn more in our detailed guide to azure database pricing and azure sql database pricing.

Credit for First 30 Days

If you want to use a service that is not included in the free services, or if you exceed the service limits in the free tier, Azure provides a credit of $200 which you can deduct from your first bill, during the first 30 days of usage. Beyond that, any further use of Azure services will be billed.

Does Azure Charge After the Free Trial?

Yes. Certain Azure services are available free, within certain limitations, during the first 12 months. Azure also provides a $200 credit for new customers. When the first 12 months end and/or when you finish using the $200 credit, you will be charged for all Azure services you use. The only exception is services that are provided free forever (see below).

Is Azure Free Forever?

The following Azure services are always free, even after the first 12 months of use. 

Keep in mind you are billed for use of other Azure resources you consume during the use of these services. For example, when deploying containers using Azure Kubernetes Service (AKS), you are billed for the virtual machines or container instances that are deployed by the service. But there is no charge for AKS itself.

Azure Pricing Models

Microsoft offers three main ways to pay for Azure VMs and other cloud resources: pay as you go, reserved instances, and spot instances.

Pay as You Go

You can pay for services on Azure according to actual usage, billed per second, with no long-term commitment or upfront payments. This provides complete flexibility to increase or decrease resources as needed. Azure virtual machines (VMs) can be automatically scaled up and down using Azure’s autoscaling features.

Related content: read our guide to Azure autoscaling 

This pricing model is mainly suitable for users who prefer flexibility, prefer to convert capital expenses to operating expenses, and applications with volatile or short-term workloads.

Reserved Instances

Azure provides Reserved Virtual Machine Instances (RVMI)—virtual machines that are pre-purchased for one or three years in a specific region. Committing to reserved instances in advance grants a discount of up to 72% compared to pay-as-you-go prices. 

Azure provides the option to replace reserved instances with others during the commitment term. It also allows users to cancel reserved instances before the end of the term, but this incurs an early termination fee.

This pricing model is suitable for applications with stable ongoing usage, organizations who have a fixed budget, or large scale applications where a certain number of virtual machines are always in use (for example, those running the central management components).

Spot Pricing

Azure lets you buy unused computing power at a discount of up to 90% compared to pay as you go prices. However, spot instances can be interrupted on short notice, so they are considered to be suitable only for workloads that can tolerate disruptions. 

Azure provides Virtual Machine Scale Sets (VMSS), an autoscaling mechanism that lets you manage groups of VMs and add spot instances automatically according to predefined policies.

Spot instances are mainly suitable for distributed, fault tolerant applications, stateless applications, workloads that are not urgent, or are heavily parallelized. 

Learn more in our guide to Azure spot instances

If you want to gain more control over Azure spot instances and use them for a broader range of applications, Spot’s infrastructure automation solutions enable you to use spot instances for AKS clusters as well as non-containerized workloads, with guaranteed availability for even production and mission-critical environments.

Azure Savings Options

Beyond the discounts granted by reserved instances and spot instances, Azure provides several additional options for saving cloud costs. 

Azure Hybrid Benefit

The Azure Hybrid Benefit program is intended for organizations that own Microsoft licenses in their on-premise data centers. If you already have Windows Server or SQL Server licenses and use them locally, you can bring those licenses to the cloud. This is known as bring your own license (BYOL).

An Azure VM running Windows or SQL Server takes into account the cost of Microsoft software licensing, so if you already have a license, you can get a discount on VM per-hour cost. Azure Hybrid Benefit applies to Windows Server VMs, SQL Server VMs, and the Azure SQL Database service. 

Combined with reserved instances, Azure Hybrid Benefit provides a discount of up to 85%.

Additionally, for some versions of Windows Server and Microsoft SQL Server to Azure, you get 3 years of free security updates, without needing to extend the license.

Azure Dev/Test Pricing

If you use Azure service for development and testing, you are eligible to substantial discounts, including:

• Running Windows VMs at the same cost of Linux VMs (essentially, you get the Microsoft license for free)
• Save up to 55% on Azure SQL Database
• Save up to 50% on Logic Apps (BizTalk server processing in the cloud)

Azure Price Matching

Azure pledges to match the cost of equivalent services on AWS. Prices are adjusted every 3 months in line with AWS price changes. 

Price matching applies to Linux VMs (compared to EC2 compute instances), Azure Functions (compared to Amazon Lambda), and Block Blob Storage ZRS HOT / COOL tier (compared to S3 Standard / Standard-Infrequent Access tier).

Azure Virtual Machine (VM) Pricing

Microsoft offers a variety of virtual machine sizes, divided into six categories for different use cases.

1. General Purpose VMs
   • Provide a balanced ratio of CPU and memory. Suitable for medium and low traffic servers, databases, and test environments.
   • Pricing starts from $0.096/hour
2. Compute Optimized
   • Provides strong CPU capabilities. Suitable for medium-traffic servers, batch processing, and network services.
   • Pricing starts from $0.0846/hour
3. Memory Optimized
   • Provides a larger amount of RAM and faster RAM hardware. Suitable for in-memory analytics, caching services, or relational databases.
   • Pricing Starts from $0.126/hour
4. Storage Optimized
   • Provides high storage throughput and I/O. Suitable for data warehouses, big data analytics, transactional SQL/NoSQL databases.
   • Pricing starts from $0.624/hour
5. Graphical Processing Units (GPU)
   • Provides GPU resources as part of the virtual machine. Suitable for deep learning, machine learning, video editing or graphics rendering.
   • Pricing starts from $0.90/hour
6. High performance computing (HPC)
   • Provides high-powered distributed CPU resources, with support for high-throughput networking such as RDMA. Suitable for massively parallel HPC workloads.
   • Pricing starts from $0.796/hour

The example prices above are for Linux VMs in the West US 2 region, and are subject to change. See up-to-date pricing for Linux virtual machines and Windows virtual machines (Windows VMs are more expensive because prices include the Microsoft license). 

Apart from the operating system, pricing for each VM size depends on a number of factors including the Azure region, the pricing model you select, and applicable saving options.

Azure Storage Pricing

Azure offers several storage services, each with its own pricing model. Here are the main services:

Azure Blob Storage

• Provides infinitely scalable object storage (similar to Amazon S3)
• Pricing starts from $0.0184 per GB-month for hot tier, $0.01 per GB-month for cold tier, and $0.00099 per GB-month for archive tier, for the first 50TB. 
• Pricing decreases progressively for larger storage volumes.

Azure Files

• Cloud-hosted file shares that can be mounted on Azure VMs or on-premise machines
• Pricing for data storage is $0.06 per GB-month for transaction optimized tier, $0.0255 for hot tier, and $0.015 for cool tier (paying for storage actually used)
• The service also provides a Premium tier, which costs $0.16 for GB provisioned (even if not actually used)
• There are additional charges for snapshots, transactions on data and data transfer volume.

Example prices above are for the West US 2 region with LRS redundancy, and are subject to change. See the official pricing page.

Azure Functions Pricing

Azure Functions provides serverless services, which are billed according to the total monthly amount of requested executions and the consumed time. 

Azure Functions offers the first 1,000,000 executions for free. Once you exceed the free allotment, the system starts billing you $0.20 per 1,000,000 executions. Note that execution time is measured in gigabyte seconds and Azure allows a minimum memory size of 128 MB.

For full details and up-to-date pricing see the official pricing page.

Azure Networking Pricing

Azure charges for several types of networking services. Here are three of the most commonly used.

Azure Virtual Network

• Lets you create an isolated, private network in the Azure cloud
• Provides the first 50 virtual networks free of charge
• Public IP addresses are priced starting from $0.0036/hour
• VNET peering within an Azure region costs $0.01 per GB for inbound/outbound data transfer
• VNET peering across regions costs $0.035 per GB in US, Europe and Australia, $0.09 in Asia, and $0.044 in South America and Africa.

Azure VPN Gateway

• Lets you connect to Azure from on-premise networks
• Pricing starts from $0.04/hour for 100 Mbps, with up to 10 S2S tunnels and up to 128 P2S tunnels

Azure Bandwidth

• Azure does not charge for inbound data transfer
• Outbound data transfer is free for the first 5 GB/month
• Above 5GB/month, the cost starts from $0.087 per GB, and decreases depending on data volume, down to $0.05 per GB over 150 TB.

For more details see the official pricing page.

Azure Cost Management Tools

Azure offers the following cost management tools, which you can use to estimate, plan, and optimize your cloud computing costs:

• Azure Price Calculator—can help you estimate the cost of the Azure services you intend to use. You can choose a resource and define the settings. The calculator can then provide you with a cost breakdown.
• Azure Cost Analysis—can help you get a detailed breakdown of the costs you are spending on Azure resources. You get an in-depth understanding of costs, and filter according to metrics like scope, time, granularity, and types of resources.
  Learn more in our detailed guide to Azure Cost Management.
• Azure Budgets—can help you create a budget that includes costs allocated across the Azure ecosystem. You can set up alert notifications to learn when a certain resource hits a limit or certain thresholds.
• Azure Advisor—can help you gain actionable insights you can use to optimize your costs. This tool analyzes your Azure configurations and uses telemetry to provide you with recommendations to improve availability, security, performance, and costs.

Azure Exports—can help you export reports generated in Azure. You can use Azure Exports to build custom reports and export the data in a CSV format.

Azure Pricing Optimization with Spot

Spot allows Azure customers to reliably use Azure spot instances (VMs) for even fault-sensitive workloads.

Whenever there is a risk of spot instance interruption, Spot will spin up new replacement spot instances in advance while gracefully draining at-risk ones. If spot instances are not available, the workload will be moved to pay-as-you-go instances. In those situations, Spot will move workloads back to spot instances as soon as they become available. This allows Azure customers to save up to 90% on their cloud compute with guaranteed workload continuity and availability. 

Learn more about Spot for Azure.

See Additional Guides on Key FinOps Topics

Together with our content partners, we have authored in-depth guides on several other topics that can also be useful as you explore the world of FinOps.

AWS Cost Optimization

Authored by Spot.io

• [Guide] AWS Cost Management: Free Tools and 7 Best Practices 
• [Guide] AWS Pricing Calculator: Calculate AWS Costs Like the Pros 
• [Report] Optimizing in a Multi-Cloud World 
• [Product] Spot Eco | Cloud Commitments and Cost Management

AWS Pricing

Authored by Spot.io

• [Guide] AWS Pricing: 5 Models & Pricing for 10 Popular AWS Services
• [Guide] AWS Fargate Pricing: Optimize Billing and Cut Costs
• [Report] Optimizing in a Multi-Cloud World 
• [Profduct] Spot Elastigroup | Spot Instance Automation

Cloud Automation

Authored by NetApp

• Cloud Automation: Why, Where and How
• Ansible Automation Scripts to Automate Volume Provisioning
• Infrastructure as Code: DevOps Done Right