How much does Azure really cost?

If you were hoping we’d say something other than “it depends”, you might be disappointed. Because it depends on the services you choose, the workloads you run, and the service agreements you sign up for.

But that doesn’t mean we’re leaving you in the dark. Azure pricing can be straightforward if you know what you’re looking for, so we’ve put together the core costs below.

And under that, you’ll find some handy tips on keeping your Azure costs low.

While tools like the Azure Pricing Calculator (which we covered in our previous guide) help estimate costs, getting to grips with Azure’s underlying structures of Microsoft Azure pricing is crucial for long-term cost management. Let’s break it down.

How does Azure pricing work?

Microsoft Azure pricing might seem complex at first glance, but it follows some consistent principles across all services. Here are the fundamentals.

Core pricing models

Azure offers several ways to pay for services:

• Pay-as-you-go is Azure’s most flexible pricing model. You pay only for what you use, billed by the second for most services. While this offers maximum flexibility, it’s typically the most expensive option for consistent workloads.
• Reserved Instances let you commit to using specific services for one or three years in exchange for significant discounts—often up to 72% compared to pay-as-you-go rates. This is particularly valuable for predictable workloads like production servers or databases.
• Spot pricing takes advantage of unused Azure capacity, offering discounts of up to 90%. The catch? Microsoft can reclaim these resources with minimal notice, making them suitable only for interruptible workloads like batch processing or testing environments.

What affects your prices?

Several factors influence the cost of Azure services:

• Region choice significantly impacts pricing. Services in the UK might cost more than in less popular regions. However, choosing a distant region to save money might not make sense when you factor in latency and data transfer costs.
• Performance tiers affect pricing across most services. Whether it’s computing power for VMs, IOPs for storage, or throughput for databases, higher performance inevitably means higher costs.
• Redundancy options like zone-redundant storage or geo-replication add to your base costs but provide important resilience for critical workloads.
• Data transfer costs often surprise new Azure users. While inbound data transfer (ingress) is typically free, outbound transfer (egress) between regions or to the internet is charged based on volume.

Azure’s billing metrics

Different Azure services use various billing metrics:

• Compute services typically bill by the second based on VM size and type.
• Storage services charge based on volume (GB), transaction numbers, and data transfer.
• Platform services often use unique metrics like execution time for Functions or DTUs (Database Transaction Units) for SQL databases.

Essential Azure services and their pricing models

Now we’ll take a look at the major Azure service categories, and what you might expect to be charged for them.

Note: We can’t guarantee these figures are accurate, due to the dynamic nature of cloud services. But as of early 2025, what you see here should be accurate enough to make reasonable calculations with. For each product/service, we’ve added links to Microsoft’s pricing page.

Compute services

Whether you’re running business applications, hosting websites, or processing data, compute services will probably be the backbone of your Azure infrastructure. This is often where organisations spend the bulk of their cloud budget. Let’s break down the pricing for key compute services.

Virtual machines

Azure VMs are the foundation of many cloud workloads, with pricing structured around several key components:

Instance size and series

Your choice of VM series dramatically affects costs. For example:

• B-series VMs (burstable) start from as little as £3.06 per month
• D-series VMs (general purpose) start from £33.47 per month
• F-series VMs (for compute optimised requirements) start from £28.37 per month

There are many more choices — take a look at the Azure VM pricing list to see them all.

Operating system 

• Linux VMs typically cost less as there’s no licensed OS cost
• Windows VMs include licensing costs in the hourly rate
• Custom images might have additional licensing implications

Usage patterns

How you run your VMs significantly impacts costs:

• Always-on VMs rack up 730 hours per month (24 hours * 30.42 average days per month)
• Dev/test VMs and some production machines, such as AVD session hosts, can be automated to run only during working hours (240 hours/month), potentially cutting costs by up to 67%
• Spot instances can slash costs by up to 90% for interruptible workloads

Azure Kubernetes Service (AKS)

Container orchestration with AKS follows a different pricing model than traditional VMs. While the AKS control plane is free — a significant advantage over some cloud providers — you’ll still need to consider several cost factors:

Node pools and compute

• You pay only for the VMs that make up your node pools
• Costs follow standard VM pricing
• Autoscaling can help optimise costs by adjusting node count based on demand

Container Registry

Storage and throughput for your container images comes at additional cost:

• Basic tier starts at £0.13 per day with 10GB storage
• Standard tier costs £0.53 per day but includes 10 web hooks
• Premium tier (£1.34 per day) adds features like geo replication and increased throughput

Monitoring and management

Kubernetes clusters generate a large amount of data that’s collected by Container Insights. It collects performance metrics, inventory data, and health state information from container hosts and containers. While basic monitoring is free, advanced features can have associated costs as part of Azure Monitor.

Azure Functions

Serverless computing with Azure Functions can be incredibly cost-effective for the right workloads, but pricing can be tricky to predict. Here’s how it breaks down:

Consumption plan

The standard serverless model includes generous free grants:

• First 1 million executions free per month
• First 400,000 GB-seconds of compute time free
• Beyond that, £0.161 per million executions
• Compute charged at £0.000013 per GB-second

Flex Consumption plan

Offers more control over scaling with two instance types:

• On-Demand instances: Scale based on need, pay £0.322 per million executions and £0.00030 per GB-second
• Always Ready instances: Pre-warmed capacity, slightly higher rates at £0.321673 per million executions, with baseline compute at £0.0000041 per GB-second and execution compute at £0.0000153 per GB-second

Premium plan

Billing for the Premium plan is based on the number of core seconds and memory allocated across instances. There’s no execution charge.

• Enhanced performance with pre-warmed instances
• Priced based on vCPU and memory usage
• No cold starts
• Better suited for constant workloads

Additionally, Function Apps can also be hosted on Azure App Service Plan – the pricing of which we cover later in this article.

Storage solutions

Storage often represents a significant portion of cloud costs, and Azure’s storage pricing varies dramatically based on your performance and redundancy needs.

Check out our Masterclass on Azure’s storage options for help figuring out what’s best for you. For now, let’s examine the main storage options and their pricing structures.

Blob storage

Azure’s object storage service uses a tiered pricing model that rewards careful data management. There’s a huge range of options you can customize that’ll affect your price quote, so we recommend having a look at the Azure storage pricing page for your calculations.

If you commit up-front to one or three years of reserved storage, prices will be lower. If you want to use Azure Storage ad-hoc, though, here’s what the Pay As You Go pricing looks like:

Access tiers

• Hot tier: £0.0153 per GB/month, ideal for frequently accessed data
• Cool tier: £0.0089 per GB/month, for data accessed less than once a month
• Archive tier: £0.0015 per GB/month, but with retrieval costs and latency
• Premium tier: £0.1512 per GB/month for extreme performance needs

⠀Operation costs

• Read/write operations are charged per 10,000 transactions
• Hot tier operations cost £0.0620 per 10,000
• Cool tier operations cost more (£0.1150 per 10,000) to discourage frequent access
• Data retrieval from Archive has significant read costs, starting at £5.50 per 10,000 read ops, with the ability for high-priority read access at around 10x that price

⠀Data redundancy options

• Locally redundant storage (LRS) offers the lowest cost
• Zone-redundant storage (ZRS) adds about 20% to base costs
• Geo-redundant storage (GRS) typically doubles your storage costs

Azure Files

Azure Files offers two main storage types – SSD (Premium) and HDD (Standard) – each with different pricing models:

Premium File Shares (SSD)

• Built for high-performance workloads
• Priced based on provisioned storage (Provisioned v1): £0.1416 per GB per month
• You pay for what you provision, not what you use
• Better for workloads requiring consistent performance

Standard File Shares (HDD)

• More cost-effective for general use
• Price based on provisioned storage (Provisioned v2): £0.0077 per GB per month

or

• Pay as You Go
  • Transaction-optimised: £0.0604 per GB per month
  • Hot: £0.0214 per GB per month
  • Cool: £0.0128 per GB per month

Additional considerations

• Snapshots and soft-deleted storage charged separately
• Transaction costs vary by tier
• Reserved capacity discounts available for longer-term commitments

Note: These prices are examples only – check Microsoft’s current Azure Files pricing page for the most up-to-date rates for your region and usage pattern.

Managed disks

Managed disks are block-level storage volumes managed by Azure that act like physical disks in an on-premises server but with the benefits of cloud scalability and redundancy. Here’s how the pricing breaks down:

Premium SSD Managed Disks

• Designed for I/O-intensive workloads requiring high performance
• Starts from £0.61 per month for 4GB (P1)
• Popular sizes include:
  • P30 (1TB): £131.53 per month
  • P40 (2TB): £252.06 per month
  • P50 (4TB): £482.20 per month

Standard SSD Managed Disks

• Good balance of performance and cost for dev/test workloads
• E30 (1TB): £67.94 per month
• Includes burst capability up to 1,000 IOPS for smaller disks
• Transaction costs charged separately

Standard HDD Managed Disks

• Most cost-effective option for infrequently accessed data
• S30 (1TB): £36.24 per month
• Fixed IOPS of 500 per disk
• Best for backup and non-critical storage

Again, these prices are examples only, because the range of custom pricing is pretty large — check Microsoft’s current Azure Managed Disks pricing page to figure out potential costs.

Remember, additional charges might apply for snapshots and data transfer.

Database services

Database services in Azure offer various purchasing models and performance tiers. Understanding these can help you avoid unnecessary costs while ensuring your apps get the performance they need.

Azure SQL Database

Azure SQL Database is Microsoft’s fully managed relational database service, offering automated maintenance, built-in security, and multiple purchasing models to match your workload. You can find exact pricing on the Azure SQL pricing page, but here’s an overview of how the pricing works:

vCore-based pricing (recommended)

• Most flexible option for scaling compute and memory independently
• Standard series (most common choice):
  • 2 vCores: £268 per month (10.2GB memory)
  • 4 vCores: £536 per month (20.4GB memory)
  • 8 vCores: £1,072 per month (40.8GB memory)
• Reserved capacity offers up to 55% savings with 3-year commitment

DTU-based pricing

• Simplified model – DTUs are Database Transaction Units, which bundle compute, storage and I/O resources
• Basic tier (development/testing):
  • 5 DTUs from £3.70 per month
  • Limited to 2GB storage

• Standard tier (production workloads):
  • S3: 100 DTUs at £110 per month
  • S6: 400 DTUs at £440 per month

• Premium tier (intensive workloads):
  • P2: 250 DTUs at £918 per month
  • P4: 500 DTUs at £1,835 per month

Storage pricing

• Base storage: £0.236 per GB per month
• Backup storage included for first 7 days
• Additional backup retention:
  • Local redundancy: £0.093 per GB per month
  • Geo-redundancy: £0.185 per GB per month

Cost-saving options

• Serverless compute for intermittent workloads
• Auto-scaling to match demand
• Reserved capacity discounts for steady workloads

Cosmos DB

Azure’s globally distributed NoSQL service uses a more complex pricing model. Check Microsoft’s current Azure Cosmos DB pricing page for the most up-to-date rates (costs can vary significantly based on your configuration, especially in multi-region deployments). The pricing consists of three main components:

Compute (Request Units)

• Standard provisioned: You specify exact Request Units per second needed
• Autoscale provisioned: Automatically scales between 10% and 100% of set maximum
  • Starts from £7.04 per month for 100 RU/s
  • Multi-region deployments multiply the cost by number of regions
• Serverless: Pay only for consumed resources
• Reserved capacity available for up to 30% savings on 1-year terms

Storage

• Transactional storage: £0.202 per GB per month
• Analytical storage: £0.017 per GB per month
• Storage charged per region where data is replicated
• Backup storage: First two copies free, additional copies £0.12 per GB

Data Transfer

• Ingress (incoming): Free
• Egress (outgoing):
  • First 5GB free
  • Europe/North America: £0.0403 per GB
  • Asia/Oceania: £0.0644 per GB
  • South America: £0.1287 per GB

Azure Database for MySQL/PostgreSQL

Azure offers managed MySQL and PostgreSQL services that handle patching, backups, and high availability for you. With Microsoft retiring the older Single Server option, Azure Database for PostgreSQL – Flexible Server is now the recommended choice for both new and existing deployments.

Both MySQL and PostgreSQL Flexible Server options follow similar pricing patterns:

• Compute charged per vCore/hour
• Storage charged per GB/month
• Built-in backup retention for 7 days
• Ability to stop/start to save costs during quiet periods

Rather than listing specific prices that are subject to change, we recommend checking Microsoft’s current pricing pages for:

• Azure Database for PostgreSQL – Flexible Server
• Azure Database for MySQL – Flexible Server

Network Services

Networking might not be the first thing you think about when planning your cloud budget, but it can have a massive impact on your overall costs. From connecting your services together to keeping them secure, Azure’s networking features are essential — but they’re also easy to overcomplicate. We do sometimes see organisations paying for premium networking features they don’t need or underestimating their data transfer costs.

Azure Firewall

Azure Firewall is a managed network security service that protects your Azure Virtual Network resources. Here’s how the pricing breaks down:

Standard Firewall

• Deployment costs: £1.006 per hour (approximately £735 per month)
• Data processing: £0.013 per GB
• Best for basic network security needs

Premium Firewall

• Deployment costs: £1.408 per hour (approximately £1,028 per month)
• Data processing: £0.013 per GB
• Includes advanced features like TLS inspection and IDPS
• Recommended for sensitive workloads

Basic Firewall

• Deployment costs: £0.318 per hour (approximately £232 per month)
• Data processing: £0.053 per GB
• Suitable for smaller workloads

Additional considerations

• No minimum data processing fees
• Inbound data processing is free
• Secured Virtual Hub deployments use the same pricing structure
• DNS proxy features included in base price

Virtual Network

Azure Virtual Networks are the fundamental building block of your private network in Azure. The basic service is free, but there are costs associated with connecting VNets together and adding network appliances.

Basic VNet Features (Free)

• Creation and management of Virtual Networks
• Up to 1,000 VNets per subscription
• Subnet management and IP addressing
• Network security groups and service endpoints

VNet Peering Costs

• Same region peering: £0.009 per GB for both inbound and outbound
• Zone 1 (e.g., UK): £0.029 per GB
• Zone 2: £0.073 per GB
• Zone 3: £0.129 per GB
• US Gov: £0.036 per GB

*Note that the following regions correspond to Zone 1, Zone 2 and Zone 3:

• Zone 1—Australia Central, Australia Central 2, Canada Central, Canada East, Central US, East US, East US 2, France Central, France South, Germany North, Germany West Central, North Central US, North Europe, Norway East, Norway West, South Central US, Switzerland North, Switzerland West, UK South, UK West, West Central US, West Europe, West US, West US 2
• Zone 2—Australia East, Australia Southeast, Central India, East Asia, Japan East, Japan West, Korea Central, Korea South, Southeast Asia, South India, West India
• Zone 3—Brazil South, South Africa North, South Africa West, UAE Central, UAE North
• (US Gov—US Gov Arizona, US Gov Texas, US Gov Virginia)

Accelerated Networking

For high-performance workloads, ranging from:

• Basic (A1): £0.021 per hour (up to 100K connections)
• Premium (A8): £2.011 per hour (up to 1.5M connections)

Note: While VNets themselves are free, remember that other networking services running within your VNet (like VPN Gateway, Application Gateway, or Azure Firewall) are charged separately.

Load Balancer

Azure Load Balancer distributes incoming network traffic across multiple resources to ensure high availability and reliability. The pricing structure is straightforward, with two main options:

Standard Load Balancer

• First 5 rules are £0.021 per hour
• Additional rules at £0.009 per rule/hour
• Data processing: £0.005 per GB for regional tier
• Inbound NAT rules are free
• Global tier available with no additional data processing charges

Gateway Load Balancer

• Gateway hours: £0.011 per hour
• Chain hours: £0.009 per hour
• Data processing: £0.004 per GB

Additional considerations

• No upfront costs
• Pay only for what you use
• Standard bandwidth charges apply
• Regional and global tiers available at same base price

Development Tools

The right development tools can dramatically speed up your application delivery — but they come with their own pricing considerations. From managing your code to deploying your applications, Azure’s developer services are designed to streamline your workflow. However, we sometimes find teams paying for more capabilities than they need, especially when it comes to testing and deployment pipelines.

Here’s how the costs break down for key services.

Azure DevOps Services

Azure DevOps provides development collaboration tools including pipelines, repos, boards, artifacts, and test plans. It uses a mixed pricing model based on users and usage. Here’s how the pricing is structured:

Basic Plan (Starting Features)

• First 5 users free
• Additional users £4.83 per user/month

Includes:

• Azure Pipelines
• Azure Repos (unlimited private Git repos)
• Azure Boards for basic work tracking
• 2GB free Artifacts storage

Azure Pipelines

• 1 Microsoft-hosted job with 1,800 minutes per month
• 1 self-hosted job with unlimited minutes
• Microsoft-hosted parallel jobs cost around £32.17 per month
• Self-hosted parallel jobs cost around £32.67 per month

Artifacts Storage

• First 2GB free
• 2-10 GB: £1.61 per GB
• 10-100 GB: £0.81 per GB
• 100-1000 GB: £0.41 per GB

Additional Options

• Test Plans: £41.82 per user/month
• Advanced security features: £39.41 per committer/month
• Visual Studio subscribers get Azure DevOps access included

App Service Plan

Azure App Service is a fully managed platform for building and hosting web applications. It follows instance-based pricing. The pricing structure offers several tiers to match different workload needs:

Free and Shared (Intended for development only)

• F1 Free: 60 CPU minutes per day, 1GB RAM
• D1 Shared: £7.63 per month, 240 CPU minutes per day
• Not recommended for production workloads

Basic Tier

• Suitable for lower-traffic websites
• B1 (1 core, 1.75GB RAM): £55.18 per month
• B2 (2 cores, 3.5GB RAM): £110.37 per month
• B3 (4 cores, 7GB RAM): £220.15 per month

Premium v3 Tier (Recommended for production)

• P1v3 (2 cores, 8GB RAM): £195.49 per month
• P2v3 (4 cores, 16GB RAM): £390.98 per month
• P3v3 (8 cores, 32GB RAM): £781.96 per month
• Memory-optimised options available (mv3 series)
• Reserved instance saves you up to 40%

App Service Environment

• I1v2 (2 cores, 8GB RAM): £335.21 per month
• I12v2 (4 cores, 16GB RAM): £670.41 per month
• I3v2 (8 cores, 32GB RAM): £1,340.83 per month
• Memory-optimised options available (mv2 series)

Additional Costs

• Custom domains: £9.64 per year (includes privacy protection)
• SSL certificates: Free with managed certificates
• Standard SSL: £56.29 per year
• Wildcard SSL: £241.25 per year

Container Registry

Azure Container Registry lets you store and manage container images for all types of container deployments. Here’s how the pricing breaks down:

Basic Tier

• £0.134 per day (approximately £4.02 per month)
• 10GB storage included
• 2 webhooks
• Suitable for learning and development

Standard Tier

• £0.537 per day (approximately £16.11 per month)
• 100GB storage included
• 10 webhooks
• Good for production workloads

Premium Tier

• £1.341 per day (approximately £40.23 per month)
• 500GB storage included
• 500 webhooks
• Geo-replication support (£1.341 per additional region)
• Enhanced throughput for concurrent docker pulls
• Connected registry feature (preview)

Additional Costs

• Extra storage: £0.00269 per GB per day
• Container builds: £0.00009 per CPU-second
• Dedicated agent pool: £0.00009 per second of instance allocation

Azure Virtual Desktop

Remote work is here to stay, and Azure Virtual Desktop has become a crucial tool for many organisations. While the service itself doesn’t have a license cost, the supporting infrastructure can add up quickly if you’re not careful.

Base Infrastructure

The AVD service itself is free, but you’ll need to consider:

• Virtual Machines
  • Multi-session Windows 10/11 typically most cost-effective
  • Choice of VM size affects hourly compute costs
  • Autoscale can help optimize costs during quiet periods
  • Reserved Instance discounts available for predictable workloads

• Storage Requirements
  • FSLogix profile storage (Premium File Shares recommended)
  • OS disks for your session hosts
  • Additional data disks if required
  • Backup storage for profile containers
  • Computer Galleries to store AVD Images

Additional Components

Several associated services will affect your total cost:

• Networking
  • VNet peering for connecting to on-premises
  • ExpressRoute if needed for optimal performance
  • Load Balancer costs for larger deployments
  • Bandwidth costs for remote user connections

• Management and Security
  • Microsoft Defender for Cloud
  • Log Analytics for monitoring
  • Azure Monitor for performance tracking
  • Backup services for VM protection

• Licensing Considerations
  • Windows 10/11 Enterprise E3 required per user
  • M365 licenses may cover the Windows license
  • Additional CALs may be needed for certain scenarios
  • RDS CALs not required for Windows 10/11 multi-session

There’s a good overview on the Azure Virtual Desktop Pricing page, but it’s just an overview of how costs work. For a full pricing calculation, you’ll have to use the Azure pricing calculator.

Controlling Azure costs and avoiding common mistakes

So you should now have a better picture of how Azure costs add up as you use different services.

If you’re wondering how to keep these costs under control, you’re not alone. Research shows that 91% of organisations are wasting money in the cloud, often due to three key issues that we see often.

We think these are the three main hurdles that stop companies from lowering their cloud bills.

The first major challenge is a lack of cloud-specific skills. Azure’s complex interactions can lead to unexpected costs, with bandwidth and backup charges being particularly notorious for catching teams off guard. While Azure’s native tools are powerful, they require pretty decent expertise to use effectively.

The solution: invest in your team’s cloud-specific abilities, and consider partnering with an expert service provider.

Overprovisioning is another common pitfall we’ve observed. Many organisations simply replicate their on-premises sizing without optimisation, failing to account for the enhanced capabilities of modern cloud resources. What worked for your legacy infrastructure might be overkill in Azure, leading to unnecessary expenses.

The solution: regular right-sizing exercises. Assess what you really need and use Azure’s pricing calculator to estimate future costs and spot opportunities to dial things down.

And related to that is the accumulation of idle and underused resources. Development environments left running after hours, orphaned disks from completed projects, and resources provisioned without clear ownership all contribute to inflated bills. Without proper governance, these costs can spiral quickly, especially in larger organisations.

The solution: monitor with Microsoft Cost Management. It’ll help you monitor resource costs and spot anomalies or trends in your expenditure.

Making smart cost decisions

Every organisation’s journey to more manageable cloud bills is unique, influenced by their workloads, business requirements, and growth plans.

So, effective cost control in Azure needs a combination of technical solutions and organisational processes. For example, using clear naming conventions, using resource tags for cost allocation, and setting up automated policies for resource cleanup all make a big difference. Regular monitoring is also really effective when combined with automated usage-based scaling and getting rid of your unused resources.

Azure has several ways to reduce costs through commitment-based discounts, each suited to different scenarios and workload types. We’ve explored these options in detail, along with various others, in our Reducing Your Cloud Costs article.

You might also be interested in our guides to Azure Savings Plans vs Reserved Instances and determining if Reserved Instances are right for your business.

But you might want further guidance on your overall cost reduction strategy.

In that case, why not get in touch with Synextra? Our team of friendly Azure experts can help you plan and implement cost reduction strategies, and help you get the most value from your cloud investment.