# Azure Cost Management

**Azure Cost Management & Optimization**

Managing costs in Azure is essential to ensure you're not overspending while using cloud services. Azure provides tools to track, analyze, and optimize expenses efficiently.

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### **1. Azure Cost Management Dashboard**

Azure offers a **Cost Management Dashboard**, a **centralized tool** where you can monitor your cloud spending. It helps businesses track how much they are using and how much they are spending.

#### **Key Features:**

✅ **Cost Reporting & Analysis** – View detailed reports on your Azure spending.\
✅ **Self-Service Cost Exploration** – Find which services are costing the most.\
✅ **Budgets & Alerts** – Set spending limits and get notifications if costs go over budget.\
✅ **Cost Recommendations** – Azure provides suggestions to **reduce expenses**.\
✅ **Automated Exports** – Export billing data for in-depth analysis.

💡 _Why is this important?_\
With the cost dashboard, you can **identify unnecessary expenses and optimize your cloud usage**.

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### **2. Factors That Affect Azure Costs**

Several factors impact how much you pay for Azure services.

#### **1. Service-Based Costing**

Azure charges you based on the type of service and how much you use it:

🔹 **Virtual Machines (VMs) & Compute Services** – You pay for the time the VM is running.\
🔹 **Serverless Services (Azure Functions, Logic Apps)** – Billed per execution (how often the function runs).\
🔹 **Storage (Blob, Files, Disks)** – Charged based on:

* **How much data you store** (GBs).
* **Operations performed** (e.g., read, write, delete).\
  🔹 **Networking** – Data transfer within Azure is mostly free, but outgoing data (egress) is billed.

#### **2. Azure Account Types & Offers**

Azure provides different pricing models:

🔹 **Azure Free Tier** – Free for **12 months**, but with limits.\
🔹 **Pay-As-You-Go** – You pay only for what you use, with no upfront cost.\
🔹 **MPN (Microsoft Partner Network)** – Free credits for Microsoft partners.\
🔹 **Visual Studio Subscription** – Free monthly Azure credits for developers.\
🔹 **Enterprise Agreement** – Discounted pricing for large organizations.\
🔹 **Partner Solutions** – Special pricing for Microsoft Cloud partners.

#### **3. Location-Based Pricing**

🔹 Azure pricing **varies by region** because infrastructure costs differ across locations.\
🔹 Running services in certain regions **may be cheaper or more expensive**.

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### **3. Cost Management & Saving Techniques**

#### **1. Azure Reservations – For Predictable Workloads**

🔹 **Reserved Instances** – Prepay for VMs **(1 or 3 years)** to save **up to 72%**.\
🔹 **Reserved Capacity** – Prepay for storage resources to get discounts.\
🔹 **Software Plans** – Discounts for Windows & SQL Server when reserved in advance.

💡 _Best for:_ Businesses with consistent cloud workloads that need long-term savings.

#### **2. Spot VMs – For Flexible, Low-Priority Workloads**

🔹 **Uses unused compute capacity** at a **lower price**.\
🔹 **Can be interrupted anytime** when Azure needs the resources.\
🔹 **Users can set a maximum price** they’re willing to pay.

💡 _Best for:_ Batch processing, rendering, or non-critical applications that can tolerate interruptions.

#### **3. Azure Hybrid Benefit – Save on Licensing Costs**

🔹 If you already own **Windows Server or SQL Server licenses**, you can **bring them to Azure**.\
🔹 Reduces licensing costs for Azure VMs.

💡 _Best for:_ Companies already using Microsoft software on-premises.

#### **4. Azure Pricing & TCO Calculators**

🔹 **Azure Pricing Calculator** – Helps estimate costs before deploying services.\
🔹 **Total Cost of Ownership (TCO) Calculator** – Compares cloud vs. on-premise costs.
