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How Does Azure Billing Work?

Microsoft Azure consists of numerous services and resources catering to diverse business requirements. From compute resources, and databases to analytic services, the Azure platform offers an extensive range of solutions to address your infrastructure needs. Hence, it is essential to understand the billing process of Azure to run a cloud platform that is cost-efficient in the long run.

Like any other cloud platform, Azure billing follows a pay-as-you-go pricing model. The cost of each service is fixed by the service provider and you pay only for the service volume you consume. This makes it a very economical option for businesses of all sizes.

What Are The 4 Types of Azure Billing Accounts?

An Azure billing account consists of multiple billing profiles. A billing profile is used to manage your invoice and payment methods associated with your Azure subscriptions. Each invoice section contains the respective charges for all your subscriptions associated with that billing profile. A single user can have access to multiple billing accounts.

Azure billing account with Azure billing profile, Azure invoice section and Azure subscriptions and services
Source: Microsoft Azure

Microsoft Azure supports the following types of billing accounts:

Microsoft Online Services Program

This type of account is created when you sign up for Azure directly through the Azure website. This billing account can accommodate 5 subscriptions. However, subscriptions transferred to this account do not count towards this limit. Any additional subscriptions are granted based on your Azure usage history.

Enterprise Agreement

This billing account is created when your organization signs an Enterprise Agreement (EA). Each EA enrollment can accommodate an unlimited number of EA accounts. An EA account can have up to 5000 subscriptions. This limit also includes those subscriptions that are in the deleted or disabled state. If these limits are exceeded, you need to create more EA accounts to create more subscriptions.

A subscription is essentially a billing container. To separate resources and implement access boundaries, it is advisable to use resource groups instead of creating multiple subscriptions.

Microsoft Customer Agreement

A billing account for Microsoft Customer Agreement is created when an organization collaborates with a Microsoft representative and signs a Microsoft Billing Agreement. In certain regions, customers who sign it through the Azure website for pay-as-you-go rates or with an Azure Free account may also have a billing account under the Microsoft Customer Agreement.

For an individual user, you can have a maximum of 5 subscriptions. Additional subscriptions can be granted based on your Azure usage history. On an enterprise level, you can create up to 5000 subscriptions.

Microsoft Partner Agreement

A billing account for a Microsoft Partner Agreement is created for Cloud Solution Provider (CSP) partners to manage their customers in the new commerce experience. To access their billing account in the Azure portal, partners must have at least one customer with an Azure plan associated with their account.

How to Export Azure Billing Data from Azure Portal?

To create or view Azure billing exports, or to schedule billing exports, you need to select the specific scope from the Azure portal and choose Cost Analysis from the menu. A scope is a node within the Azure billing account where you manage billing data, payments, and invoices, and conduct general account management activities. Azure has various scopes such as management groups, subscriptions, resource groups, and resources.

Step 1:

  • Login to the Azure portal
  • To export your billing data from subscriptions, pick a particular subscription from the list, and choose cost analysis. In the cost analysis page, click on Configure at the top and select Exports.
  • Select Create and enter your Export details.

Step 2:

  • Enter the name of your Export.
  • The Export type can be a one-time export, daily, weekly, or monthly export.
  • Specify the Azure subscription for your Azure storage account and select the resource group. You can select an existing group or create a new one.
  • Select the storage account name or create a new one.
  • Select your location/Azure region.
  • Specify the storage container name and the directory path where you need to export your file.
  • Review your details and click on Create.
Azure billing data export, Microsoft Azure data export
Azure Portal

Your export is now enabled. It will take 12-24 hours for the export process to begin. However, it will take longer for the data to get reflected in the exported files.

5 Factors That Affect the Cost of Your Azure Services

Understanding the reasons that affect your Azure billing helps you optimize your resources and keep your cloud cost under control. Some of the key factors that influence your Azure billing are listed below

Compute Power

The compute power refers to the amount of CPU and memory consumed by your Azure resources. Resources that consume high CPU utilization and memory result in higher costs.

Using spot instances to process fault-tolerant workloads can significantly reduce your computing cost. Similarly, using serverless functions like Azure Functions to run event-driven processes can prevent the wastage of compute capacity.

Micorsoft Azure Services, Azure Compute Services
Azure Compute Services

Storage

The storage services are billed based on the amount of storage you consume. Azure services like blob storage and disk leads to higher charges. To reduce your storage costs, it is advisable to archive inactive and less accessed data at lower costs.

Micorsoft Azure Services, Azure Storage Services
Azure Storage Services

Hardware

Some storage services provide the option to choose the type of hardware to store your data. Storage options like HDDs have a slower access rate and also cost less. On the other hand, SDDs have higher access rates and come with higher costs. Choosing the right type of hardware depending on your storage and access needs helps to optimize the cost spent on your hardware.

Bandwidth

Your ingress and egress costs can significantly impact your Azure billing. Optimizing your applications to minimize unnecessary data transfers can help control these costs. Services like Azure Content Delivery Network (CDN) can cache static content geographically closer to your users, reducing egress costs and improving user experience.

Region

Some services have different pricing depending on the region where it is hosted. Choosing data centers closer to your target audience and based on your data access pattern can significantly impact your Azure billing.

How to Monitor Your Cloud Spend With Azure Cost Management?

Azure Cost Management consists of a comprehensive set of tools that can manage your cloud spending effectively. The cost Management tool is accessible to anyone who has access to an Azure billing account or a resource management scope.

Azure Cost Management helps you analyze your Azure billing, set up Cost Alerts, and proactively monitor your resources to minimize your cloud expenses. The tool suite allows you to visualize your spending pattern, identify trends, predict future costs, and manage any usage spikes. Azure Cost Management includes tools like Cost Analysis, Cost Alerts, Budgets, and Azure Advisor to monitor your Azure billing expenses.

Azure Cost Management Tools, Azure Cost Analysis, Azure Cost Alerts, Azure Budgets, Azure Advisor recommendations
Azure Cost Management

Cost Analysis

  • Azure Cost Analysis converts your cost data into visual graphs and charts.
  • It organizes your Azure billing data by services, resource groups, departments, and time periods for a better understanding of your cloud expenditure.

Cost Alerts

  • Azure Cost Alerts helps you set spending limits for your Azure billing account and sends alerts and trigger notifications whenever your cloud spending exceeds this threshold.
  • You can select your preferred notification channel such as email or SMS. This helps you take immediate corrective actions and keeps your cloud budget under control.

Azure Budgets

  • Setting up Azure budgets helps to proactively monitor your cloud spending.
  • By defining your budget, organizations can receive cloud spending data in real-time and receive alerts for any cost spikes or potential overruns.
  • It provides detailed reporting and analysis to understand your resource utilization and find areas for improvement.

Azure Advisor Recommendations

  • Azure Advisor analyzes your cloud configurations and usage patterns and provides insights and best practice recommendations to improve the overall health and efficiency of your Azure environment.
  • It continuously monitors your resources to identify opportunities to improve the cost-effectiveness, performance, reliability, and security of your Azure resources.

Conclusion

Understanding Azure billing helps you in effective cloud cost management. While the pay-as-you-go model offers flexibility to control your cloud costs, implementing effective cost management strategies and proactive monitoring is crucial for an optimized cloud environment. Tools like Azure Cost Management, Azure Tags, and implementing cost allocation rules help businesses control their cloud expenses.

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