When considering cloud transformation, one of the first question is who much will this costs. Definitely migrating from on premise, there certain differences between this two realms. Especially with changing the perspective from CAPEX & OPEX, to OPEX only. However, while going to Azure, it is worth to understand Azure costs.
Here, I will not be concentrating on mindset dispute or CAPEX vs OPEX area. What I would like to highlight are the costs consideration in the cloud and where to check the costs.
First of all it is important to understand the cloud platform and be aware of certain differences between cloud and on-premise realms.
So, what you are paying for?
The motto of Cloud Service Provides is ‘pay for what you use’. This of course has pros and cons. You pay only for portion of compute, but if you deploy the service but you do not utilize it, be aware that you are still charged. Good example is VM (IaaS). When you deploy the VM you are paying for the storage (disks), compute resources associated with the machine and additionally for outgoing data. If the machine is idle, you are not using it, you still pay for this resources. In order to limit the costs, you can shut down VM (remember that in order to avoid the costs VM needs to be in deallocated state). Then you decrease the costs, but you are still paying for storage.
I will write separately about how to decrease the costs as well how you can improve your costs management in Azure.
Understanding the cloud
There are 3 basic service models IaaS, PaaS and SaaS. Each model has certain differences. In SaaS you are paying on monthly subscription basis per user. Such solution applies e.g. for M365 suite, Azure AD, Intune etc. With IaaS you pay for the size of VM, which is dependent of couple of things among all: CPU, RAM, size of temporary disk, maximum number of NICs, maximum number of disks, expected bandwidth, generation of VM, VM size, VM type. Of course this is related to underneath hardware and its capabilities.
With PaaS the pricing model is similar to IaaS, but you are paying for different features. I.e. with AppService, you choose the plan, and based on features you need, you choose the pricing tier. Please note that pricing can differ, and often is, between the regions. This is determined by certain costs related with certain location as well as popularity of the service.
Azure costs
In the Azure you pay basically for the resources associated with the service of your choice. Do remember, that underneath cloud platform, you have datacenter on top of which you have the services available for purchase.
So the price per service is CSP combination for 3 basic resources CPU, RAM and Storage space, including price for CSP additional service.
What are those services?
CSP offers you VMs, containers, serverless computing etc., but along way other features which theoretically are free of charge, but practically are included in the pricing for services you are paying for. Additionally, when choosing cloud you do not need to take care of aspects related to datacenter such as physical DC security, reliability of the service, maintenance of hardware and virtualization, etc.
What is free of charge in Azure?
By default, when going to the cloud the Azure AD is free of change, you have identity container with additional IAM features with no additional costs. Of course free version is limited, but basic security features like MFA are available.
DDoS protection – the basic DDoS feature for the platform is enable. You are not able to configure it specifically for your resources or apps (this is the privilege for the customers that paid for advanced version), but still your environment is protected.
Azure Monitor – the next feature you received within the standard costs is monitoring. This service has plenty of features, that I will not cover in this article, but it is important to understand, what basic health aspects of your platform are enabled for you.
Azure Security Center – tool for security evaluation.
Azure Advisor – the service that assess the resources that you deploy within you Azure environment and providing you recommendations within 4 areas: security, costs, performance and high availability.
AAD basic tenant – Identity and Access Management service in Azure. The basic features are free of charge.
Azure Policy – This helps to maintain the consistency of the security of your environment. As well as enforce certain standards or boundaries within your landscape.
Azure MFA – Multi-Factor Authentication service, which is available as part of IAM free of additional charges.
Azure Health – the service allowing you to check status availability of Azure platform. It provides detection of any disruptions globally. It notifies you, if any of your services are affected due to problems with platform.
Tags – solution to label your resources allowing you to group them, improve the manageability or do automation.
Tools for costs evaluation – Total Cost of Ownership, Azure Pricing Calculator, Azure Advisor and Cost Management + Billing, as described in next section.
Read more about cloud services offered at no additional cost.
Tools for Cost evaluation – also with no additional charge
Along with plenty of above listed options, you are provided with a few tools for cost management. The tools two of this tools are available without the need of having Azure account. This allows you to do evaluation before making decision of going to the cloud.
No Azure Account needed
- Total Cost of Ownership the online tool that allows you to compare the cost between on-premise and Azure. It covers aspects like the electricity, IT labor, datacenter, networking, software etc.
- Azure Pricing Calculator – the online tool allowing you to assess the cost of the resources you plan to deploy.
Azure Account needed
Two other tools, available at no additional costs, are available only to owner of Azure Account
- Azure Advisor – The service that assess your resources and provides you cost optimization recommendations, which are specific for your situation. Beside costs options, it covers also security, performance and high availability suggestions.
- Azure Cost Management + Billing – The service providing the features for managing the costs of your resources. You can do necessary analysis, set budgets or limits of your expenditures. The dashboard allows you to do visualization of the costs and divide it per groups. Additionally you can export the reports of your expenses in form of CSV or PNG.
With Enterprise Agreement
EA portal is the tool provided for organizations that have Enterprise Agreement with Microsoft. It allows you to centrally manage the spending for entire organizations, create proper structure including departments and accounts. Main features covers: reporting, export of historical costs, creating organization structure, centrally manage the permissions to create subscriptions, integrate with PowerBI for reporting purposes.
Of course this is in a nutshell, there are definitely more aspect to jump into more details, but then it would not be an article but at list a solid book 😊.
