Azure Pricing: Pros and Cons for Every Option
Most of the questions we hear around Azure stem from a lack of understanding about Azure pricing. And as a matter of fact, Microsoft has recently lowered prices of many of the most popular virtual machines.
Although we’ll explain all the ways to purchase Azure in this article, let’s start with the basics.
What is Azure and why do you need it for your company?
Azure is the Microsoft trusted cloud platform that includes a growing collection of integrated cloud services.
Azure can help your company optimize:
- Websites– the cloud provides complete flexibility in capacity of websites. Your website won’t crash or slow down when you launch an amazing product thanks to the automatic capacity-increase feature.
- Mobile Applications– Within minutes, your team can store data in the cloud, authenticate users and push notifications to millions of devices. A single developer can use the entire Microsoft infrastructure without having to deal with the hassle of building it himself.
- Big Data– Azure can be used for a large amount of data that needs to be stored and analyzed.
- Storage and Backup– No need to physically manage the machines yourself, and users have the ability to scale up at a moment’s notice.
- Virtual Machines/Virtual Networks– You can extend your existing server farm without the need to spec out a new piece of hardware and wait for it to be delivered. You can even spin up a VM in a matter of minutes or create an entire virtual network without having to buy a single piece of hardware
Why is Azure the most trusted and secure cloud platform?
Security and privacy are embedded into the development of Azure. Microsoft has the most comprehensive compliance coverage of any cloud provider, spending approximately $1B a year to make sure it is the safest cloud in the world. Microsoft Azure trust is centered around:
- Security – Microsoft works to keep your data safe
- Privacy – You own and control your customer data
- Transparency – You know how your data is stored and accessed, and how Microsoft helps secure it
- Compliance – Microsoft conforms to global standards and has more certification than any other cloud provider
Visit the Microsoft Azure Trust Center for more information.
How is Azure cost calculated?
Depending on the type of service, cost is calculated based on dollars per hour, dollars per gigabyte, and/or dollars per transaction for consumption-based services. You can download our eBook around Azure pricing and licensing to get more information around cost calculations.
Below we’ll cover the various ways to purchase Azure licensing and discuss the pros and cons of the four most common options.
Option 1: Microsoft Azure Direct (Pay-As-You-Go)
With Azure Direct, you create an account on the Azure portal and add credit/debit card to the Azure account. You will be charged in the next month based on the amount of Azure services you consumed.
With this option, you pay Microsoft directly without any support or involvement from a Microsoft Partner.
- Easy to setup, you just need a credit card to get started
- No commitment – only pay for what you use each month
- Very flexible
- Billing comes directly from Microsoft
- Azure subscription is tied to Microsoft Account (aka “LiveID”); you must use Microsoft account credentials to log in to the Azure management portal.
- You must use a credit card for billing.
- If your credit card expires or is declined, the Azure account may be suspended. This will result in all public IP addresses being released and all workloads in Azure being suspended and deactivated.
- There is no licensing team integration or engagement – neither from Microsoft nor from a Microsoft Partner.
- You will not have access to Azure Enterprise Portal features like BI Dashboards, and billing and payment information is available on Azure Account Center.
- You must go directly to Microsoft for support, which requires a higher level of technical expertise.
Option 2: Cloud Solution Provider (CSP)
The Microsoft Cloud Solution Provider program enables Crayon, as a Microsoft Cloud Solution Provider, to directly manage the Azure solution for you. This means you can more easily purchase tools, products, and services with your subscription in one predictable monthly bill. Beyond the inherent benefits of the cloud, you will have more frequent interactions with the Provider (Crayon) giving you more tailored guidance and support than can be provided directly by Microsoft.
- You can purchase all major commercial suites and standalone products for Microsoft Office 365, Microsoft Intune, Enterprise Mobility Suite (EMS), Microsoft Azure, and Microsoft Dynamics CRM Online.
- Monthly Billing allows you to have predictable OPEX spending.
- You will have an established relationship with a knowledgeable Key Account Manager who can guide you through Azure and provide additional resources.
- Flexible billing and configuration on the Crayon customized portal.
- One point of contact for all your software needs on top of Azure education, support and consulting.
- Crayon will be able to assist with the entire migration process.
- It’s impossible to just convert a traditional Azure subscription or Azure EA subscription to CSP. You need to move resources from source subscription (Traditional or EA) to destination subscription (CSP). This is a manual process. Read more here.
- The Cloud Solution Provider is always an Owner of the Azure CSP subscription. Provider administrators can assign Owner rights to your IT admins, but you are not able to revoke Owner rights from the Provider.
- Currently there are only BYOL third party solutions in Azure Marketplace. If you wish to buy a third party solution license with Azure services purchased through CSP, then the Provider can sell this license separately or include it in the service cost (e.g. Provider can add a license subscription to BYOL Barracuda Firewall or Citrix NetScaler, which will be separate from Azure CSP bill).
Option 3: Azure in Enterprise Agreement (EA) and Server and Cloud Enrollment (SCE)
With Server and Cloud Enrollment, the organization makes an upfront monetary commitment for each of the three years of the EA. Azure Services are classified as an additional product which means that if an organization chooses to buy Azure in this way, then they need to commit to one monetary commitment SKU ($12,000) per month.
Any of the Azure consumption-based services may be used, and the amount spent is taken off the Monetary Commitment throughout the year.
- Any time you commit to $20,000 annual spend, you become a managed account with an assigned Microsoft representative.
- There is no need to use a personal credit card. Billing is done through terms.
- User-friendly billing configuration and administration.
- Subscription is much more flexible – you are allowed to go over your commitment and there will be no service interruptions.
- One EA commitment can be used for multiple subscriptions which allows you to create different environment from the same funding.
- Easy direct migration from Pay-As-You-Go portal to EA portal.
- Must pay annual commitment upfront (CAPEX spending instead of OPEX).
- Can only adjust the annual commitment during anniversary.
- Funds that haven’t been used throughout the year will be lost at the end of the term.
Option 4: Microsoft Azure MPSA
MPSA is a higher level agreement that can be purchased only through select Microsoft Partners. This is an evergreen agreement and does not require minimum spend for Azure. Customers pay for actual usage of consumption services, quarterly in arrears. User licensed services are purchased in the same way as Online Services such as Office 365
- Same agreement for Azure, online subscriptions such as Office 365, Volume Licenses, and on-premises transaction licenses.
- Access to Azure Enterprise Portal
- No minimum requirement
- Pay quarterly in arrears
- Create as many purchasing accounts as you need to allow for better monitoring of Azure consumption.
- You do not get to be on the Managed Account List (MAL) for Microsoft and do not have a Microsoft rep assigned to you (even if your spending exceeds $12,000 per year)
- Partner owns the pricing and you will be invoiced by the Partner and not Microsoft
Accurately predicting your Azure spend can be a complex exercise. At Crayon we can help you not only determine what your spend might be going forward, but also prevent you from choosing and option that will limit your ability to maximize ROI in the future.
To learn more about Azure, read our eBook Azure Pricing: Find Your Optimal Licensing Strategy.