Azure VM Pricing Explained

Azure virtual machines (VM) let you run multiple operating systems in the cloud, reducing hardware costs. VMs allow you to create safe and sound virtual environments.

However, choosing the right VM is crucial to save your organization from overspending on resources that waste your budget while under-provisioning impacts performance.

Azure offers a wide range of VMs, each with different pricing. Understanding Azure VM Pricing upfront helps you optimize expenses and avoid unnecessary charges.

Plus, you get to monitor usage and adjust with the Azure cost optimization tool, isn’t that great?

In this guide, we’ll break down pricing models such as:

• Azure VM sizes pricing
• Azure instance cost comparison
• Azure Windows VM pricing

So that you are better equipped to choose the most cost-effective VM for your needs.

Exploring the Differences Between Azure Pay as You Go and Reserved

When setting up a virtual machine on Azure, you get 2 main pricing options:

• Pay-As-You-Go (PAYG)
• Reserved Instances

Each comes with its own benefits, and choosing the right one depends upon how long you plan to use the VM and your budget.

Pay-As-You-Go

This is a flexible pricing model where you pay only for the time your VM is running. There are no long-term commitments which makes it ideal for:

• Short-term projects
• Unpredictable workloads
• Testing and development

Since you are billed by the second or hour, this option costs more in the long run but gives you the freedom to start and stop VMs as needed.

Reserved Instances

With reserved instances, you commit to use a VM for 1 or 3 years in exchange for huge discounts up to 72% compared to the PAYG model.

This works best for:

• Consistent, long-term workloads
• Businesses looking to cut cloud costs
• Production environments that need stability

However, you pay upfront or in monthly installments whether you use the VM or not, so it’s less flexible than PAYG.

Wondering which one you should choose?

Here’s what can help:

• If you need flexibility and don’t want a long-term commitment, PAYG is the way to go.
• If your workload is steady and you want to save money in the long run, reserved instances are the smarter choice.

Easy, right?

Picking the right plan doesn’t have to be difficult, all you need to do is evaluate your usage carefully before deciding.

Types of Azure Virtual Machines

Feeling overwhelmed by the variety of Azure VM Pricing options?

Don’t worry, we’ll break it down for you.

Azure offers a range of VM families each optimized for specific workloads. Choosing the right VM depends entirely on your workload.

Different workloads require different VM types and when you select the right one for your organization, it can optimize your performance while being cost-effective.

Let’s explore the available options and find the best fit for your organization.

When selecting a VM consider not only its performance but also its Azure GPU VM pricing and storage costs to avoid overspending.

Now that you know about Azure VMs, you can deploy them through the Azure marketplace, which offers thousands of preconfigured VM images from both Microsoft and third-party providers. If you need a more customized setup, you can use Azure Resources Manager (ARM) or even create your own custom VM images.

No matter your needs, whether it’s a simple setup or a high-performance system, Azure gives you plenty of options to find the right VM for your workload.

Azure VM Pricing Factors

Azure Virtual Machines (VMs) don’t have a fixed price. Yes, what you pay depends on several factors.

Before launching a VM, knowing what contributes to the cost is important so you can manage your budget wisely.

Let’s see them:

1. The difference between Windows and Linux VMs

Azure Virtual Machines (VMs) can run Windows or Linux, and their pricing varies due to licensing costs and support fees.

Let’s see how.

Azure Windows VM pricing

Windows VMs require a Windows server license which increases the cost. They also come with pre-installed services like Active Directory and IIS making them a good choice for businesses that rely on Microsoft tools.

However, Windows VMs can use Azure Hybrid Benefit which lets you save on Windows licensing if you already own on-prem licenses.

For example, A D2s v5 VM costs more with Windows OS than with the Linux VM.

Azure Linux VM pricing

Linux VMs require no licensing fees which makes it a cheaper option than Windows.

Popular distributions like Ubuntu, CentOS, and SUSE are available.

For example, A D2s v5 VM running Ubuntu is more affordable than its Windows counterpart.

• You can expect to get good discounts on both OS types when reserved for 1 or 3 years.

Bottom line: If cost is your main concern, go with Linux. If you need Microsoft-specific tools, Windows VM justifies the extra price.

2. Azure region cost

Azure operates data centers worldwide, and the cost of running a VM depends on the region you select. Prices vary due to factors like:

• Demand and usage
• Infrastructure costs
• Regulatory and compliance factors

Always compare pricing across multiple Azure regions before launching a VM. If compliance isn’t a concern you can choose a less expensive region and reduce costs significantly.

3. Storage types

Storage is another major factor in Azure VM costs. Different storage types offer different levels of performance and durability, which impacts pricing.

You can choose from

• Standard HDD: Prices start from $1.54 per 32 GiB per month
• Standard SSD: Priced at around $9.60 per month for a 128 GiB standard SSD (E10)
• Premium SSD: Its price starts from $35.84 per month for 256 GiB
• Ultra disk: A 512 GiB Ultra disk is priced at $118.08 inclusive of IOPS and throughput charges.

Choose storage based on your actual needs.

For instance, if you’re running a simple web server, a standard SSD is more than enough.

4. Networking usage costs

Azure charges based on how much data moves in and out of your VM.

Here’s how the networking costs work:

• Inbound traffic is free unless you don’t use a premium service like ExpressRoute
• Outbound traffic is charged based on the amount of data transferred, the more you send, the higher your costs.
• VNet peering: If your VMs communicate across different Azure regions, you’ll pay for both data transfer and peering charges.
• If you use a public IP, VPN Gateway, or Azure load balancer you may incur additional networking costs.

Tip-to minimize networking costs keep traffic within the same region whenever possible.

It’s also essential to factor in Azure VM monthly costs when budgeting for long-term usage.

Always analyze your requirements before picking expensive options, for you might not always need the highest-tier resources for every workload.

Azure VM Pricing Models

Not one but Azure offers multiple pricing models for you to choose from, based on your budget and workload needs, let’s discuss them in detail so that you know which one you should opt for.

Let’s take a look at Azure VM price comparison and how they work:

1. Pay-As-You-Go (Flexible but costly)

With PAYG, you only pay for the time the VM is running, similar to how your electricity bills work.

If you use a VM for 5 hours, you pay for those 5 hours. It’s flexible but costs add up quickly if you don’t manage usage properly.

For instance, PAYG costs $0.09600 per hour for D2s v3 VM

2. Reserved Instances (Big savings for long-term use)

If you know you’ll need a VM for 1 or 3 years, you can reserve it in advance at a much lower price, this saves you money in the long run.

By committing to either 1 or 3 years you can save up to 72% on your VM cost as compared to the PAYG model.

For instance, the 3-year reserved instance price is $0.0369 per hour for D2s v3 VM

3. Spot VMs (cheapest, but unreliable)

Spot VMs are available at huge discounts.

However, here’s the thing: Azure has the right to take them back anytime if someone else needs them. They’re great for tasks that don’t need to run 24/7, like batch processing or testing.

For instance, Spot VMs cost $0.0497 per hour for D2s v3 VM

4. Using Existing Windows license

If you already own a Windows Server license, you don’t have to pay for it again when using Azure.

This is called the Azure Hybrid Benefit and it helps to cut down costs for Windows-based VMs.

This one works best if you are looking to reduce your VM pricing.

With different models, businesses can optimize their Azure cloud VM pricing based on workload needs. Each option has its pros and cons, so choosing the right one depends on how long you need the VM and how flexible your workload is.

Choosing the Right Azure VM

Looking to cut down your Azure VM monthly pricing?

Here’s how you can reduce costs by up to 72% with the right approach.

1. Pick the right VM size and type

Not all workloads need high-performance VMs. Choose a VM that matches your actual requirements and save your neck from overpaying for unused resources.

2. Optimize Windows Licensing

If you are running Windows VMs 24/7, licensing fees can add up quickly. However, with the right core count and optimization, you can cut Windows licensing costs by at least 30%

3. Deallocate unused VMs

Azure charges per hour when the VM is running. To avoid unnecessary costs, deallocate VMs when they’re not in use. This stops Azure from charging compute resources.

4. Use Azure Cost Optimization Tool

Azure provides built-in cost management tools that help you:

• Track usage
• Identify cost-saving opportunities
• Optimize VM spending

These help to optimize your Azure VM cost.

Smart choices = Big savings.

With these tips, you are all set to make the most of Azure VMs.

Conclusion

With hundreds of Azure VM options available, the key is to balance performance with cost.

Before making a choice, assess your:

• Workload
• Business needs
• Budget

A quick audit of your organization’s requirements can help identify the most cost-effective VM and manage Azure instance cost-efficiently.

Take your time and explore Azure VM Pricing models before making any decision.

Remember, the right decision upfront can cut expenses by up to 72% in the long run while maintaining the infrastructure performance.

FAQs

1. Can I get an Azure VM for free?

Yes, you can get Azure VM for free and for up to 750 hours per month.

2. How much does a VM license cost?

VM license starts at around $0.096 per hour. However, the license cost varies depending on:

• The VM type
• Size
• Operating system, you choose.

3. Does Azure charge if the VM is stopped?

Yes, it charges for stopped VMs but it depends on their state.

4. How are VMs billed in Azure?

You don’t pay a flat fee for using VMs, they are charged based on:

• The time they are in use
• Their size
• The operating system used
• The region they are deployed in.

5. How do I reduce VM costs in Azure?

You can reduce your Azure VM cost by:

Choosing the right size and type of VM

• Utilizing the Azure VM pricing plans.
• Shutting down unused VMs
• Monitor usage with Azure cost optimization tools for better command of optimization.