Understanding the Costs of an Azure VM

Azure Virtual Machines (Azure VMs) offers Microsoft-hosted VMs, generally running Windows Server and Linux. Azure VMs enable organizations to reduce capital costs and possibly operating costs for existing workloads with little or no code rewriting. However, organizations need to consider more than the rental cost of the VM, including a variety of infrastructure cost factors, to accurately predict the operating costs of a VM.

Azure VM Components and Costs

Azure VMs are provided in a utility-based pricing model calculated based on each minute of use, with hourly pricing, and charged each month.

The infrastructure charges for an Azure VM instance are not calculated based on a single line item, however. Multiple charges come into play when a VM is running in Azure, including the following:

• Compute capacity for the VM
• Storage capacity and I/O for VM data disks
• Network charges for outbound traffic (egress) and other services.

Additional charges typically accrue for use of other services and software by applications running in an Azure VM or collection of VMs, and compute, storage, and networking infrastructure charges determine the base cost of running a VM. Microsoft hosts an Azure calculator tool to estimate the costs of running a workload on Azure, but to use it effectively, an organization must understand the VM compute, storage, and network requirements for their workload, as well as any additional Azure resources and services needed to run the workload.