Cost Management and Service Level Agreements (SLA) in Azure are important because they determine how much money it will cost a business to run various workloads in the cloud. In this article, we’ll look at methods to plan for and manage costs in Azure in addition to how Azure Service Level Agreements work in tandem with SLAs and service lifecycles. There are a variety of factors that can affect costs when computing in Azure such as resource types, services, locations, and inbound vs outbound traffic. Let’s investigate.

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Azure Cost Impacts

Factors that can affect cost start with the types of resources being deployed. Virtual Machines may have different pricing that a CosmosDB instance. The location of resources being deployed will also have an affect on cost. Traffic costs can have an impact, most commonly on the outbound direction.

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Reducing Costs

To help reduce costs in Azure businesses can make use of reserved instances, reserved capacity, hybrid use benefit, and spot pricing.

Reserved Instances Reserve virtual machines in advance and save 72 percent compared to Pay As You Go (PAYG) Pricing when a 1 Year or 3 Year commitment is made.

Reserved Capacity Achieve significant savings (product specific) on Azure SQL Database, Azure Cosmos DB, Azure Synapse Analytics, and Azure Cache for Redis.

Reserved Capacity Enables you to more easily manage costs across predictable and variable workloads and help optimize budgeting and forecasting.

Hybrid Use Benefit A licensing benefit that helps greatly reduce the costs of running workloads in the cloud. Make use of on-premise software assurance enabled Windows Server or SQL Server licenses on Azure.

Spot Pricing Access unused Azure compute capacity at up to 90 percent less than PAYG pricing. Applies to virtual machines only and service is subject to eviction.

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Azure Pricing Calculator

The Azure Pricing Calculator is a tool to use before depolyment to estimate Azure resource costs. You can choose the region, instance, tiers, and more to match functionality and budget needs. The Total Cost of Ownership Calculator is also a pre-deployment tool that can be used when trying to estimate costs when migrating workloads to Azure.

Azure Pricing Calculator is good to estimate costs prior to migration

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Azure Cost Management

Once resources are deployed to Azure, you still have ways to manage costs using Azure Cost Management. This tool is for after you deploy and is used to analyze, manage, and optimize the costs of running workloads. Azure Advisor is an example of a tool that can be used after deployment.

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Azure Service Level Agreements

Azure Service Level Agreements exist to provide a clear explanation of the availability of an Azure service. An SLA can be used to a lesser extent with performance. Failing to deploy a service in a manner that meets the SLA requirements is an action that can affect SLAs. For example, you don’t want to use Spot Pricing and expect a 99.99 uptime.