Microsoft Azure Pricing in 2024 [Understanding Cloud Prices]

Though Azure pricing is primarily pay-as-you-go, the specifics of certain cloud computing services’ pricing are not as straightforward. As a result, billing can be confusing and users can end up with unexpected charges.

This Microsoft Azure pricing guide takes a deep dive into Azure cloud computing’s pricing pattern, examining the pricing models, how they work, different pricing tiers and the cost of running popular Azure services.

How Does Microsoft Azure Pricing Work?

Microsoft Azure pricing works by charging you for what you use; it is pay-as-you-go. In most instances, the services you use on Microsoft Azure are charged at an hourly rate. However, instances such as Azure Blob Storage and Azure Functions are charged by usage volume.

For instance, in Azure Blob Storage, usage volume is based on the size of data stored, the amount of data transferred and the number of data operations. Moreover, when using Azure Functions, pricing is based on usage details such as the number of executions and the code execution time. Read more about Azure in our Microsoft Azure review.

What Are the Different Microsoft Azure Pricing Models?

The different Microsoft Azure pricing models for Virtual Machines include pay-as-you-go, Azure Savings Plan for Compute, Reservations, Spot, Azure Hybrid Benefit and Dev/Test pricing.

Pay-As-You-Go

The pay-as-you-go pricing is the default pricing model on Azure. It charges based on usage and requires no commitment. The pay-as-you-go model typically charges per hour, but the basis of the unit charge may be different depending on the service. For instance, with storage solutions, you’ll be charged based on the amount of data stored over a given period.

The pay-as-you-go pricing model is on-demand. Therefore, when you provision any service on Azure without requesting or adding discounted pricing, you get it for face value. Of course, this makes it the most expensive pricing model.

Azure Savings Plan for Compute

Azure Savings Plan for Compute is a discounted pricing model that offers up to 65% off pay-as-you-go rates. To use this pricing model, you have to commit to an hourly spend for one year or three years.

As its name implies, Azure Savings Plan for Compute is primarily available for compute resources. It is ideal for long-running workloads — particularly dynamic workloads or ones with changing infrastructure needs.

Reservations

Azure Reservations is similar to Azure Savings Plan for Compute in that it also requires a one- or three-year commitment. However, unlike Savings Plan for Compute, which requires an hourly spend commitment, Reservations requires a commitment to using services.

Also unlike Azure Savings Plan for Compute, you can get Reservations for various services, including Virtual Machines, SQL Edge, Data Explorer, Disk Storage, Azure SQL Database and Databricks. Moreover, you can cancel, exchange or request a refund for Azure Reservations but not for Azure Savings Plan for Compute.

Spot

Azure Spot Virtual Machines offers unused compute capacity at discounted rates of up to 90% off. The catch is that the compute capacity is ephemeral, so there may be workload interruptions. In fact, if Azure needs the compute capacity back, you get only a 30-second notice before eviction. Spot Virtual Machines is best for workloads that can tolerate interruptions.

The main limitation of Spot Virtual Machines pricing is that it is not available for B-series instances or promotional instances. However, if you ever need B-series instances or a promo version of any instance, you can combine them with Spot Virtual Machines instances.

Azure Hybrid Benefit

Azure Hybrid Benefit is a pricing model that offers discounts when you bring your on-premises Windows Server or SQL Server licenses or your Linux subscriptions to Azure Cloud. It is available in all Azure regions, and when combined with other pricing models, such as Azure Reservations, it can yield a discount of over 80% off regular rates.

When using your on-premises license with Azure Hybrid Benefit, you can no longer use the same license for your on-premises infrastructure. That said, you have a 180-day window during which you can still use the license both on premises and in the Azure cloud.

Dev/Test Pricing

As the name implies, Dev/Test pricing is ideal for development or test workloads. It offers Visual Studio subscribers discounts of up to 57% off select services and is available through one of three plans: Pay-As-You-Go Dev/Test, Enterprise Dev/Test and Azure Plan for Dev/Test.

Pay-As-You-Go Dev/Test offers discounted pay-as-you-go rates, while Enterprise Dev/Test offers even lower rates for non-production workloads on your organization’s enterprise agreement. The Azure Plan for Dev/Test offers lower rates based on your organization’s Microsoft Customer Agreement.

What Are the Different Microsoft Azure Pricing Tiers?

The different Microsoft Azure pricing tiers include a free tier and paid tier. Find out more about what these pricing tiers entail in the descriptions below.

Free Tier

The Azure free tier offers services for free, some of which are always free and others that are free for a limited period (typically 12 months). Services in Azure’s always-free tier include Azure Advisor, API Management, Text to Speech, Visual Studio Code, Azure Virtual Network and Functions.

Note that some of these always-free services are only free within certain usage limits. For instance, you get only one million requests per month for free on Azure Functions.

Azure services that are free for the first 12 months after signup include Azure Files, Azure VPN Gateway, Azure AI Translator, Azure Virtual Machines, Key Vault and Managed Disks. As with always-free services, some of these are free within certain limits. For example, you get only two million characters for free within the 12-month period with Azure AI Translator’s S0 tier.

As part of the free tier, Azure gives you a $200 credit for a 30-day test run when you sign up.

Paid Tier (Pay-As-You-Go)

Azure’s paid tier is pay-as-you-go, so you primarily pay only for what you use. You gain access to free services on the paid tier, but you’ll be charged for anything you use beyond the limits of those free services. Of course, you’ll also be charged for any service you use that isn’t free from the start.

What Are the Prices of Different Microsoft Azure Cloud Services and Products?

Based on factors like usage volume, region and service tier, the prices of Azure cloud services can vary from one situation to another. We discuss the pricing of popular Azure services like Virtual Machines, Blob Storage and Azure Files below.

Azure Virtual Machines Pricing

Azure Virtual Machines offers servers over the internet with Windows or Linux OS. In the East U.S. region, a Windows Azure VM can be as cheap as $10 per month (license included) or as expensive as $147,500 per month (license included). Linux Azure VMs in the same region go for as little as $3.80 per month or as much as $125,000 per month.

Azure Blob Storage Pricing

Azure Blob Storage is Azure’s object storage service. It offers data storage across five storage tiers: Premium, Hot, Cool, Cold and Archive. Data storage in the Premium and Cool tiers costs $0.15 per GB per month, but in the Cold and Archive tiers, it costs $0.0036 per GB and $0.00099 per GB, respectively.

In the Hot tier, you pay $0.021 per GB for the first 50 TB, $0.02 per GB for the next 450 TB and $0.0191 per GB for data storage above 500 TB per month. Operation and data transfer charges also apply.

Azure Files Pricing

Azure Files offers a distributed network file system. Azure Files is available across four tiers: Premium, Hot, Cool and Transaction Optimized. Data storage in the Hot, Cool and Transaction Optimized tiers costs $0.0287 per GiB/month, $0.0228 per GiB/month and $0.06 per GiB/month, respectively. Other charges include transactions, data transfer and file sync.

Microsoft Entra ID Pricing

Microsoft Entra ID, formerly known as Azure Active Directory, is an identity management tool. Unit prices for Microsoft Entra ID vary between $3 per unit per month to $12 per unit per month. For instance, Microsoft Entra Workload ID costs $3 per workload identity per month, while Microsoft Entra Suite costs $12 per user per month.

Azure App Service Pricing

Azure App Service is a software deployment and management service that abstracts infrastructure management. Azure App Service offers a free plan, which includes 60 CPU minutes per day.

The Basic plan costs between $13 and $49 per month on Linux OS in the East U.S. region, depending on the instance. In the same region, Azure App Service’s Premium plan costs between $57 and $2,200 per month with Linux OS, while the Environment plan goes for anywhere from about $280 per month to more than $9,000 per month with Linux OS.

Generally, Azure App Service instances running on Windows OS are more expensive than equivalent Linux instances.

Azure Firewall Pricing

Azure Firewall is a managed network security service that monitors and controls resource traffic. It is available via three plans: Basic, Standard and Premium. Deployment and data processing costs for the basic plan are $0.395 per deployment hour and $0.065 per GB processed, respectively.

For Standard and Premium, deployment costs $1.25 per deployment hour and $1.75 per deployment hour, respectively. However, both usage tiers have the same data processing cost — $0.016 per GB processed. The same rates apply for all three usage tiers when using Azure Firewall with Secured Virtual Hub.

What Are the Most Expensive Microsoft Azure Services?

Some of the most expensive Microsoft Azure Services include Microsoft Sentinel, Azure DDoS Protection, Azure Kubernetes Service and Memory-Optimized Virtual Machines. These services’ unit rates are some of the highest on Microsoft Azure, but your usage ultimately determines the total bill. Minimal usage of even the most expensive services should not lead to excessive costs.

What Are the Cheapest Microsoft Azure Services?

The cheapest Microsoft Azure services include General-Purpose Virtual Machines, Azure Blob Storage, Azure Container Instances, Azure Disk Storage and Azure App Service. As with the most expensive services, your usage of these services and the service tier ultimately determine how much you pay.

How to Optimize Microsoft Azure Cost

You can optimize Microsoft Azure costs by rightsizing, using autoscaling, disabling idle resources, and using discounted pricing models. Here’s how these practices can help you optimize your Azure costs:

Rightsizing: Rightsizing involves provisioning resources that are just right to run specific workloads. When you rightsize, you want to ensure the resources are sufficient — not excessive — for running workloads. That way you’re not paying for more expensive, larger resources, and instead pay only for what you truly need.
Using autoscaling: Autoscaling is the process of dynamically adjusting resources with changing workload demands. Autoscaling ensures your app performs optimally while paying only for what you need.
In times of high demand, autoscaling expands your resources, ensuring your app continues to function as it should. Then, during times of low demand, resources shrink to meet the reduced demand, preventing excessive cost accrual.
Disabling idle resources: Disabling idle resources will save you from raking in superfluous costs, thereby optimizing your overall Microsoft Azure cost. Azure Advisor is a crucial tool for identifying idle or underutilized resources.
Using discounted pricing models: Azure offers discounted pricing models, including Reservations, Azure Savings Plan for Compute, Dev/Test and Azure Hybrid Benefit. When applicable, use these pricing models to implement the same resources at markedly cheaper rates.

What Are the Different Microsoft Azure Cost-Saving Options?

The different Microsoft Azure cost-saving options include Azure Reservations, Azure Savings Plan for Compute, Azure Spot Virtual Machines, Azure Hybrid Benefit and Azure Dev/Test pricing.

Azure Reservations: Azure Reservations can save you up to 72% when you reserve compute capacity and commit to using said capacity for one year or three years. You can set up Azure Reservations for various services, including Azure Virtual Machines, Azure Disk Storage and Azure SQL Database.
Azure Savings Plan for Compute: Azure Savings Plan for Compute is a cost-saving plan that involves committing to an hourly spend for one year or three years in return for a discount of up to 65% off pay-as-you-go rates.
Azure Spot Virtual Machines: Azure Spot Virtual Machines offers unused/excess compute capacity at a discount of up to 90% off regular rates. However, it is not suited for running long-term workloads.
Azure Hybrid Benefit: Azure Hybrid Benefit is a cost-saving offering that can provide up to 80% off when combined with other cost-saving plans. The main requirement for Azure Hybrid Benefit is to bring an existing Windows Server license or SQL Server license to your Azure cloud environment.
Azure Dev/Test pricing: Azure Dev/Test pricing is an offer available to Visual Studio subscribers for some Azure services. It is ideal for running non-production workloads, especially since it does not come with an SLA. It can provide savings of up to 57%.

What Are the Microsoft Azure Cost Management Tools?

Microsoft Azure cost management tools include Microsoft Cost Management, Azure Advisor, Azure Resource Manager and Azure Policy. Of these four cost optimization tools, Microsoft Cost Management is the most relevant to cost management, as it offers features like cost alerting, analytics, monitoring, budgeting and recommendations.

Azure Advisor is primarily a recommendation service; it recommends optimizations not only for cost but also for security, performance and reliability. Azure Resource Manager comes in handy when tagging resources for collective monitoring, and with Azure Policy, you can define the ambits within which costs accrue in your Azure account.

How Expensive Is Microsoft Azure?

Microsoft Azure is not very expensive; its prices don’t differ much from those of the other two cloud service providers that make up the top three cloud computing platforms (AWS and Google Cloud, plus Azure). That said, the cost of Azure can vary from cheap to very expensive. It all depends on the service, usage, region and features.

Is Microsoft Azure More Expensive Than GCP?

Google Cloud Platform is typically more expensive than Microsoft Azure for running general-purpose and memory-optimized servers. That said, both cloud providers offer many services, so there are variations in the relative costs of Microsoft Azure vs GCP. Read more about GCP in our Google Cloud review.

Is Microsoft Azure More Expensive Than AWS?

Microsoft Azure and AWS usually cost about the same for general-purpose instances, but for memory-optimized instances, Azure is sometimes more expensive than AWS. However, both cloud providers have many services with varying relative costs, so the total cost will depend on your use case.

Final Thoughts

Azure pricing is mainly usage-based. You can get discounts for long-term commitments and existing licenses, but you’ll still pay based on what you use, albeit at lower rates. Furthermore, Azure pricing varies widely across services and depends on factors like the usage tier, instance type and region. Therefore, you may see marked changes in cost between scenarios.

In your experience, is AWS more expensive than Azure? What is the most affordable cloud computing platform? What’s the most you’ve spent on Azure Blob Storage? Have you spent more on object storage elsewhere? Tell us more about your cloud pricing experience by leaving a comment below. Thank you for reading.

FAQ

Azure can cost as little as a few dollars per month to more than $100 per hour. It all depends on the service you use, the region and the service timer.
The three main pricing models of Azure include pay-as-you-go, Reserved Instances and Savings Plan for Compute. Azure Spot Virtual Machines is another Azure pricing model.
AWS is cheaper than Azure when running some memory-optimized instances. However, for some services, like SQL Server, Azure is cheaper than AWS.
Azure offers services like Azure Cosmos DB and Azure Files free for 12 months. However, services such as Advisor and Azure Maps are always free.