Are you wondering how much it might cost to move your workloads to the Microsoft Azure cloud?

The Azure Pricing Calculator is the tool you’re looking for. Made to help you predict costs before deploying your workloads, it’s a great way to keep your cloud spending low.

But before you get stuck in, it’s worth knowing what it can and can’t do.

Here’s the Synextra take on the Azure cost calculator: how it saves you money, how to use it, and what you should do after using it.

What does the Azure Pricing Calculator do?

Azure Pricing Calculator is an important part of your cloud cost optimisation. It’s a free web-based tool that lets you estimate the costs of Azure services based on the configurations you want, before you actually spend anything.

The tool lets you model your exact setup, choosing everything from resource types to regions, and see a detailed cost breakdown for every component. Need to estimate costs for specific workloads like storage, databases, or networking? The calculator allows you to build out multiple configurations, pricing in both what you’ll use and how you’ll use it.

What’s the difference between Microsoft Cost Management and Azure Pricing Calculator?

If you’ve heard of both of these, it might not be clear which one you need. But these two tools have distinct use cases: they’re used at different stages of your cloud adoption and management.

The Azure Pricing Calculator is a single tool which you use to plan your Azure costs ahead of time. It’s used for pre-deployment cost estimation based on your hypothetical usage amounts. It’s also sometimes referred to the Azure Cost Calculator.

Microsoft Cost Management (which we cover in detail in our Azure Cost Management guide) is a more wide-ranging suite of tools. It’s used for the ongoing monitoring of real costs throughout your Azure infrastructure. Through Cost Management, you can see not just Azure resources but even multi-cloud setups. It helps you create and manage budgets, track your costs and usage, and links with Azure Advisor (a digital assistant that recommends optimisations around performance, security and reliability).

Think of them like this:

1. Microsoft Cost Management: “What is this costing me?”

1. Azure Pricing Calculator: “What is this going to cost me?”

How Azure Pricing Calculator actually saves you money

So how do you actually discover cost-saving opportunities using the Pricing Calculator?

Azure has a range of features designed to help you control and optimise costs, but many of them need you to configure them proactively.

So you can use the Azure Pricing Calculator to get recommendations on the best money-saving options for your setup, including:

1) Reserved instances

One of the most effective ways to save money is by committing to reserved instances for predictable workloads, on services like Azure VMs, databases and storage. These allow you to lock in discounted pricing for one- or three-year terms, offering savings of up to 72% compared to pay-as-you-go rates. When you’re using the Azure Pricing Calculator, toggle the reserved instance option to see how it impacts your costs.

2) Spot VMs

For non-critical or interruptible workloads, spot VMs can provide significant cost reductions. These resources take advantage of unused Azure capacity at heavily discounted rates, making them ideal for batch jobs, testing, or applications that can tolerate interruptions.

3) Scaling schedules

If you schedule resources to scale up or down based on business hours, you can eliminate waste from idle resources. For example, turning off Azure Virtual Desktop hosts outside of business hours can save a considerable amount. Use the calculator to model scenarios with scaled-down resources during off-peak times.

4) Hybrid benefits

If you already own on-premises licences for Windows Server or SQL Server with Software Assurance, you can take advantage of the Azure Hybrid Benefit to reduce costs further. The Azure Pricing Calculator allows you to factor in these savings during your estimate.

5) Testing configurations

Don’t forget to experiment with different configurations in the calculator. Whether it’s trying smaller VM sizes, lower-cost storage tiers, or alternative regions, tweaking your setup can uncover significant savings without bringing down your performance levels.

How to estimate costs with the Azure Pricing Calculator

So, let’s get into it. The Azure Pricing Calculator is quite extensive, but once you know where to start, it’s fairly straightforward.

Here’s a step-by-step guide to help you get the most out of it:

Step 1: Access the Azure Pricing Calculator

Head over to the Azure Pricing Calculator main page. If you’re logged in to your Azure account, you’ll be able to save your cost estimates as you go and make use of any pricing arrangements in your Azure agreement.

Step 2: Select your currency

The calculator tends to default to US dollars. If you’re like us and prefer using pounds, head to the bottom of the page first, and on the right-hand side you’ll see an option to change it.

Step 3: Choose your services

Now it’s time to select your services by using the menu on the left.

There’s a huge range of services you can choose from (the entire Azure offering is massive). In ‘featured’ you’ll find some of the most common, like VMs, storage and SQL databases.

Underneath this, you’ve got the full range including compute, networking, load balancers, automation, machine learning, AI, IoT, DevOps, and more.

Add as many as you like to your selection.

Step 4: Consider using an example scenario

Don’t want to manually create your full configuration? You can take the easy route instead and select a pre-configured example setup.

In this tab, you can select a full setup of Azure AI Studio, for example, and it’ll populate your basket with all the necessary components that’d require. Here are the components it adds for Azure AI Studio on a 1-month reserved option:

You can click the arrow on the left to expand each option and customise its individual options.

Step 5: Add usage details

Now you’ll want to go into each service and estimate your usage.

For example, here we’re looking at Azure virtual machines:

Imagine we’ll be using a single VM for a simple web app. We’ve selected the region (UK South), and instance (the specs of the VM – in this case, a general-purpose low-spec B2s with 2-core CPU.)

(Tip: if you happen to be choosing a virtual machine, and you’re overwhelmed by the options, try using Copilot, located on the top right of the Azure Portal. You can tell the AI assistant what you need, and it’ll recommend the best options. Or you can select the “help me choose the right VM size for my workload” button near the top of the pane).

We’ve also defined our estimated hours per month of usage to help calculate the cost.

If you’re pricing up other services, you’ll have to enter specific data about each one (like size and speed for storage, bandwidth for networking, or license counts for Azure DevOps).

If you’re not sure what numbers to enter, start with your current on-premises or cloud workload data as a baseline. If you don’t have those, just stick with the default data.

Step 6: Save and export your options

Now we’ve entered enough data to calculate some totals.

At the bottom of the page, you’ll now see your totals: an estimated upfront cost and an estimated monthly cost.

You can click ‘save’ if you’re logged in, if you want to come back to your configuration. And if you click ‘export’, you can get everything put together in an Excel spreadsheet.

Remember, you can customise multiple ‘baskets’ at a time to see different pricing configurations. They’re arranged in tabs in the middle of the page:

Common pitfalls with Azure Pricing Calculator and how to avoid them

While the Azure Pricing Calculator is a powerful tool, it’s not foolproof. Many IT pros fall into common traps that can lead to inaccurate estimates or unexpected costs down the line. Here are some mistakes to watch out for and how to avoid them:

1) Overlooking hidden costs

The calculator does a great job of breaking down costs for individual services, but it’s easy to forget about add-ons like bandwidth, backup storage, or transactional charges for databases and storage accounts. Always double-check the “fine print” of your configuration to ensure you’re capturing the full scope of your deployment.

2) Ignoring scaling and variability

Workloads often fluctuate, especially during peak business periods. If you only estimate costs based on average usage, you might be unprepared for spikes in demand.

To estimate costs accurately, you might need to manually calculate the impact of scaling by modelling different usage scenarios in the calculator. For instance, factor in baseline resources that run 24/7 and add additional configurations for peak workloads based on expected usage hours. This ensures your estimates cover both steady-state operations and demand surges.

Azure gives you the option to enable auto-scaling to optimise your resources dynamically, but this means you can’t really estimate an accurate cost ahead of time if you’re not sure of how variable things will get.

3) Misconfiguring regions

As Azure prices vary by region, selecting the wrong location can skew your estimates. Always choose the Azure region where your users or customers are based to reflect the actual costs. If you’re exploring redundancy, don’t forget to factor in the costs for additional regions.

4) Failing to consider cost-saving options

Many users overlook features like Azure reserved instances, savings plans, or spot pricing, which can lead to significant savings. For example, a reserved instance can save you up to 72% compared to pay-as-you-go pricing for long-term workloads. Take the time to explore these options in the calculator.

5) Forgetting to account for future growth

If your business is scaling, your Azure requirements will likely grow too. Failing to plan for increased usage can result in underestimating long-term costs. Use the calculator to run scenarios that include projected growth, making sure you’re prepared for what lies ahead.

When to revisit your pricing estimates

Your Azure environment will inevitably evolve alongside your business. That’s why revisiting your cost estimates regularly is just as important as creating them in the first place. Here are some situations where you should revisit your estimates:

• After business growth or new projects. As your business grows, so does your cloud footprint. Adding new services, scaling existing workloads, or launching a new project can all impact your costs. Regularly updating your Azure Pricing Calculator estimates means you’ll be prepared for these changes.

• When your workload patterns change. Your workloads might change over time. For example, a new marketing campaign could drive more traffic to your website, increasing your cloud resource consumption. Revisiting your estimates allows you to model these variations and stay ahead of unexpected costs.

• When there are Azure updates. Microsoft frequently adds new features, services, and pricing options to Azure. Keeping up with these changes can reveal new opportunities to optimise your costs. For example, new VM types or storage options could provide better value than your current setup.

• When it’s time for a review. Even if nothing major changes, it’s good practice to review your Azure estimates every quarter. This helps you identify trends, spot potential inefficiencies, and keep your costs aligned with your business objectives.

Planning beyond initial costs with the Total Cost of Ownership Calculator

While the Azure Pricing Calculator helps you estimate your cloud billing costs, the TCO (Total Cost of Ownership) Calculator helps you figure out a wider picture of business costs by comparing Azure to your current on-premises setup.

Factoring in costs like hardware, software, support, energy consumption, cooling, and IT staff, it can highlight long-term savings and justify your cloud strategy.

For example, you might find out that moving 50 VMs from a local data centre to Azure could save up to 30% over five years when considering maintenance and hardware replacement costs.

You can explore the TCO Calculator here. It’s especially helpful when presenting your cloud migration plan to leadership, but you’ll need to get your numbers spot-on.

Your next steps after using Azure Pricing Calculator

Now that you’ve got a much better idea of what it might cost to run the high-performance cloud services you want, what’s next?

Well, the calculator page itself has a good rundown of your three possible next steps:

1. Start using Azure right away with Pay-as-you-Go.
2. Contact Azure sales to speak to a specialist who will advise you.
3. Find an Azure partner to help you plan, implement and manage Azure products throughout your organisation.

We think the third option is best.

While you can get moving right now (with free Azure credit for new accounts), you might need more than just a pricing estimate to build a cost-effective and powerful setup. And talking to an Azure advisor risks upselling – they won’t necessarily be looking to find the best deal for you.

Instead, you could speak to an expert partner like Synextra. We’re a boutique MSP, helping all sorts of companies transform their business with cloud technology.
Get in touch today and one of our elite cloud experts will help you become an Azure-powered game changer.