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Understanding Azure's pricing models is critical for managing cloud costs effectively. Azure offers several pricing options for virtual machines and compute services, each suited to different workload patterns. Choosing the right model can save your organisation significant money.
The cost of running an Azure VM is determined by several factors:
| Factor | Description |
|---|---|
| VM size | vCPUs, memory, and features (e.g., Standard_D4s_v5) |
| Region | Prices vary by region — UK South may differ from East US |
| Operating system | Linux is typically cheaper than Windows (due to licensing) |
| Disk type and size | Managed disk costs are separate from compute |
| Networking | Outbound data transfer charges (inbound is free) |
| Pricing model | Pay-As-You-Go, Reserved, Spot, or Hybrid Benefit |
Important: Compute and storage are billed separately. Even when a VM is deallocated, you still pay for the managed disks.
Pay-As-You-Go is the default pricing model. You pay for compute capacity per second with no upfront commitment.
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