This is a summary of Azure Fundamentals part 6: Describe Azure cost management and service level agreements, both for my own exam revision and to help others get a more concise digest of the otherwise long-winded material.

Plan and Manage Costs

This part is a summary of the Plan and manage your Azure costs module.

Total Cost of Ownership

Total Cost of Ownership (TCO) refers to the total cost of running a data centre, which may include hidden costs such as software licences, electricity, network maintenance, salaries, etc.

There’s a TCO Calculator where you can compare running workloads on-premises vs on Azure (estimated). Here you:

1. Define your workloads, i.e. select servers, databases, storage and networking.
2. Adjust assumptions: here you can reuse existing licences via Software Assurance, decide whether you want to replicate storage across regions, and adjust other costs such as electricity, salaries and network maintenance.
3. View report. Here you can adjust the timeframe between 1-5 years, and see a breakdown per category (e.g. compute or storage).

Azure Subscriptions

The different types of subscriptions are:

• Free trial: 12 months of popular free services, credit against any service for 30 days, and more than 25 services always free. Services are disabled when the trial ends or the credit expires.
• Pay as you go: pay for what you use. You can apply for volume discounts and prepaid invoicing.
• Member offers: other subscriptions (e.g. Visual Studio) can provide discounts against Azure usage.

Purchasing Azure Services

You can purchase Azure services via:

• Enterprise Agreement: commit to spending a certain amount over 3 years to get custom pricing.
• Web Direct: use the Azure Portal directly; billed monthly.
• Cloud Solution Provider: via a reseller (Microsoft partner).

Factors Affecting Cost

• Resource type: different resources have different billing criteria
• Usage meters: resources have billable units, e.g. VMs have CPU time and other units)
• Resource usage: you can deallocate a VM to stop incurring charges, but you could still be charged for the disk if you leave it around
• Subscription types (e.g. free trial)
• Azure Marketplace: billing structures set by third party
• Location: different regions have different prices
• Bandwidth: network traffic in/out of Azure data centres is billed according to which geographical zone they’re in

Use the Azure Pricing calculator to estimate the cost of running a number of Azure services.

Manage and Minimise Costs

• Understand estimated costs: use the TCO and Pricing calculators, and consult the docs about usage and billing for the relevant services
• Monitor usage with Azure Advisor which provides suggestions (e.g. unused resources)
• Use spending limits to restrict spending and avoid accidental overrun (there are also subscription limits and quotas from Azure)
• Azure Reservations: prepay and get up to 72% discount over Pay as you go prices
• Choose low-cost regions and locations (but keep in mind that you pay for network traffic between regions)
• Research available cost-saving offers
• Use Azure Cost Management + Billing to control spending (breakdown of costs)
• Apply tags to identify cost owners (i.e. organise billing data, e.g. by department)
• Resize underutilised VMs (need to turn them off, so consider downtime)
• Deallocate VMs during off hours (e.g. dev/test running only during business hours) – can be scheduled
• Delete unused resources
• Migrate from IaaS to PaaS services
• Save on licencing costs
  • Choose cost-effective OS (i.e. Linux)
  • Use Azure Hybrid Benefit to repurpose Windows Server or SQL Server software licences on Azure via Software Assurance

Service Lifecycle and Availability

This part is a summary of the Choose the right Azure services by examining SLAs and service lifecycle module.

Service Level Agreements

Service Level Agreements (SLA) define guarantees about the service provided by Azure, usually around availability/uptime.

• Access SLAs from Service Level Agreements portal.
• Uptime/downtime is measured as a percentage, e.g. 99.9% (or three 9’s) means the service can be down 0.1% of the time, which on a weekly basis works out to 10.1 minutes per week.
• Downtime measurements are cumulative.
• If the SLA is breached, you can claim a service credit which is a percentage of the fees you paid (defined in the SLA).
• There’s generally no SLA for free services.
• Azure status tells you when there’s an outage. From there you can also reach Azure Service Health, a personalised status view within the Azure Portal.
• You get a composite SLA by multiplying the SLA for each service.
• SLA is affected by customisations on resources (e.g. tier, or disk type) as well as redundancy (e.g. VMs behind a load balancer).

Azure Service Lifecycle

New services go through the following stages:

1. Development
2. Public preview
3. General availability

Things in preview include:

• Preview (new) services
• Preview features for existing services
• Preview features for Azure Portal

Use the Azure updates page to keep track of the lifecycle status of features/services.