Planning and Managing Costs

In this lecture, you will learn about the various aspects of planning and managing costs in Microsoft Azure. It covers the different purchasing options available for Azure products and services, factors that affect Azure costs, and strategies for cost optimization.

To begin with, the lecture introduces the three primary types of Azure customers: enterprise customers, web direct customers, and cloud solution providers (CSPs). It explains that enterprise customers often enter into an enterprise agreement that commits them to a certain spend on Azure services, paid annually and potentially at customized pricing. Web direct customers pay monthly for services at public rates, directly via the Azure website. CSPs are Microsoft partners that manage billing and payments for their clients’ Azure services.

Next, the factors that influence Azure costs are addressed. These include the type of resources, the services you use, and the geographical location of the Azure services. The costs can vary based on resource-specific usage, subscription types, and whether you’re using Azure’s own products or those from third-party vendors.

The lecture moves on to describe how Azure categorizes geographical regions into zones for billing purposes, noting that inbound data transfers to Azure data centers are typically free, but outbound transfers are not. It details the four billing zones and clarifies the difference between billing zones and availability zones in Azure, which are related to data center failure protection.

You will then discover how to use Azure’s pricing calculator to estimate costs for various products, understanding that this tool provides estimates rather than exact price quotes. The lecture emphasizes that actual costs can differ based on when you buy, your payment currency, and your customer type.

Another important tool covered is the Total Cost of Ownership (TCO) calculator, which helps estimate savings by migrating to Azure. You will learn how to define your current on-premises workloads, adjust key assumptions to match your actual costs, and interpret the generated report to compare on-premises costs with potential Azure costs.

To minimize Azure expenses, the lecture suggests performing a cost analysis, using Azure’s pricing and TCO calculators, managing resource provisioning based on demand with the help of Azure Advisor, understanding spending limits, and considering Azure reservations for discounts on advance payments. Moreover, selecting low-cost locations for deploying resources and staying updated with Azure offers can lead to significant savings.

Finally, the lecture covers Azure Cost Management, a set of tools that help you monitor, allocate, and optimize costs with features like reporting, data enrichment, budget creation, alerting, and recommendations for resource optimization. These tools are designed to enhance visibility into your Azure spending and help manage costs more effectively, all provided at no additional cost.