Unveiling Azure Functions: How Powerful Are They Really?

As software development goes through its trends, serverless architectures (the abstraction of servers, infrastructure, and operating systems) are getting more traction.

Just as microservice architectures, FaaS architectures are getting more and more popular.

While functions are potent, it remains crucial to understand where to use them.

Let’s get into that…

What is the best use of Azure Functions? 

Azure Functions offers a wide range of event-driven triggers and bindings, allowing you to connect to other services without writing additional integration code.

So, what do you use Azure Functions for? In general, you use Azure Functions to: 

• Build web APIs 
• Respond to database changes 
• Process IoT streams 
• Manage scheduled tasks 
• Support many other automation scenarios 

When you have a single event or task that requires limited custom code to achieve your desired outcome, use Azure Functions. So, what can you do with Azure Functions?  

These are some examples: 

These scenarios let you build event-driven systems using modern, loosely coupled architecture.

Azure Functions seamlessly integrates with other Azure services with triggers and bindings that control your inputs and outputs.

You can connect with storage accounts, messaging solutions, API points, and more.

It supports multiple programming languages including: 

• C# 
• Java 
• JavaScript 
• Python 
• TypeScript 
• PowerShell 

You can also extend support to other languages like Go and Rust using a feature in Azure Functions called Custom Handlers. 

What are the benefits of Azure Functions? 

• Pricing flexibility: Get the best price for your scenario with a variety of consumption to always-on pricing tiers, along with the option to run your functions in a container.  
• Easy to use: Functions are easy to create, manage, and update using popular development tools such as the Azure Portal, Visual Studio, Visual Studio Code, etc, for deployments and debugging. 
• Scalability: Autoscale up and down functions based on demand 
• Integrates with other Azure Services: One of the great things about Azure Functions is that it seamlessly integrates with other Azure Integration services (Azure Service Bus, Event Hubs, Event Grids, etc).

What are the limitations of Azure Functions? 

Azure Functions is really powerful, especially for handling short-lived tasks and scaling with API traffic. They spin up and down automatically, making them great for high-volume, low-complexity workloads. 

However, the challenge appears with medium to large applications. As the number of functions grows, things become harder to manage. Instead of building focused, purpose-driven components, many teams end up creating sprawling networks of Azure Functions – hundreds or even thousands – with different triggers and no clear structure. 

The issue is: it gets to a point where the system becomes too complex to understand or control effectively. 

Another issue is long-running operations. Functions are designed for quick jobs (ETLs, or requests that last a few hundred milliseconds). If you're running APIs that need 5 seconds or more, the cost and complexity can quickly become a problem. 

Yet, when you have a small application – you can get away with it. 

Hosting Plans in Azure Functions 

When you create a function app in Azure, you must choose a hosting plan for your app. Microsoft Azure offers 5 available hosting plans: 

1. Consumption Plan 
2. Premium Plan 
3. Flex Consumption Plan
4. App Service Plan 
5. Kubernetes:  
6. ASE

These five available hosting plans determine the following behaviours: 

• How your function app is scaled 
• The (compute) resources available to each function app instance 
• Support for advanced features (like Azure Virtual Network connectivity)

Consumption Plan 

With a consumption plan, compute instances scale automatically based on incoming requests or events. You're billed only for the time your functions are actually running. Hence, if there is no usage, there are no charges. 

Premium Plan 

While similar to the consumption plan, the key difference is that within the Premium Plan, you define a number of pre-warmed instances that stay online – and can respond immediately. When your function runs, Azure adds extra compute resources as needed. 

Thus, you’re billed for those continuous pre-warmed instances, plus any additional instances used when Azure scales your app. That means you still pay for the pre-warmed instances even if your Function App doesn’t run during a period. 

Flex Consumption Plan

The Flex Consumption Plan is a relative new option, made for scenarios demanding flexible scaling and detailed control over compute options.

It offers pay-as-you-go pricing, including optional always-ready instances. Also, it comes with a monthly free grant of 250,000 executions and 100,000 GB-s of resource consumption per subscription across all function apps. 

Scaling is automatic: instances increase or decrease based on incoming events and your concurrency settings.

App Service Plan 

Using the App Service Plan, you can run your functions like your web apps. If you are already using App Service for your other applications, then your functions can run on the same plan at no additional cost. It's best suited for long-running scenarios where durable functions aren’t an option. 

Kubernetes 

This plan gives you a fully isolated, dedicated environment running on a Kubernetes cluster. 

 App Service Environment (ASE) 

ASE offers a dedicated and isolated environment for securely running App Service apps at high scale.

How to pick the right Hosting Plan for Azure Functions? 

Start with Consumption… 

As with many Azure services, the first thing you need to decide is your hosting plan. When it comes to Azure Functions, start with the Consumption Plan – so you pay only for what you use. It handles automatic scaling well during high or unpredictable traffic, offering many of the core benefits of Azure Functions. For most use cases, this plan fits just fine. 

Use the Premium Plan if… 

Some of your workloads might require than what the Consumption Plan offers. Maybe you’re worried about cold starts. A cold start can be a concern in the Consumption Plan, where the app has to spin up if no instance is running. If your API is used by headless services, this isn’t usually a problem. But if it’s tied to a web app, and you’re concerned about even slight delays after idle periods, you might want to switch to Premium or look into workarounds to keep the function warm. 

Therefore, if low latency matters, and your apps run (or nearly) continuously, opt for the Premium Plan. It avoids cold starts by keeping instances warm, so functions respond instantly. 

But there are more reasons to pick a Premium Plan: 

• Premium also includes features like VNet integration and private endpoints for more secure deployments.  
• And for high-volume, low-duration workloads, Premium can actually be cheaper than Consumption, since pricing is based on instances rather than executions. 

Pick the App Service Plan… 

The App Service Plan is a good choice if your workloads are predictable and you want consistent costs. It also makes sense if you’re already using App Service for your web apps. You can run Function Apps on the same plan to reduce overhead. 

Use Kubernetes for your Multi-Cloud environments 

Using Kubernetes as hosting plan for your functions is a great choice when dealing with multi-cloud setups or when you need strong on-prem integration. It offers the most flexibility, especially if you're managing workloads across Azure or other cloud providers (AWS, GCP, etc). 

The table below gives you a quick overview:

Azure Functions Pricing: How Much Does it Cost? 

The question that likely lingers in your mind is: “How much does Azure Functions cost me?” 

The short answer: it depends on how you use it.  

Azure Function Pricing is made up of these main pricing models: 

1. Consumption  
2. Premium 
3. Dedicated (App Service) Plan

1. Consumption Plan 

The Consumption Plan is the most widely used pricing model for Azure Functions. It follows a pay-as-you-go approach, where you’re charged based on actual usage. 

It charges based on execution count, duration, and resource use: 

• It's free up to a generous threshold (a monthly free grant of 1 million requests and 400,000 GB-s of resource usage).  
• Beyond that, costs are fractions of a cent per run.  

For long-running or high-frequency workloads, that can get expensive. 

Let’s break down the pricing for the Consumption Plan: 

Example 

Let’s imagine your function runs for 250 milliseconds and uses 256 MB of memory, the execution cost would be: 0.000016 × 256 × 0.25 = $0.001024 per execution. 

If this function runs 2 million times in a month, the total execution cost would be: 

2 million × $0.20 per million = $400 for executions alone.  

2. Premium Plan 

While it offers the same features and auto-scaling as the Consumption Plan, it doesn’t have cold starts and has predictable performance and support for VNet integration. It runs on dedicated resources, giving you consistent performance and high availability without sharing infrastructure with other customers. 

Cost is based on your selected pricing tier and based on the amount of vCPU and memory your function app uses. You can select from several size options depending on your performance and scaling needs.

The Premium Plan is built for workloads that need more power, longer execution times, and features like VNet integration or hybrid connectivity.  

3. Dedicated (App Service) Plan 

Runs functions on dedicated VMs – useful when you need isolation, custom images, 

or have existing App Service infrastructure. Billing is based on your chosen App Service pricing tier.

Best Practices for using Azure Functions 

While functions can be great for multiple scenarios, it’s often challenging to get started. The best practices below give you an early head start: 

Avoid long-running functions 

Functions can become heavy when you use too many Node.js dependencies. Large and long-running functions can cause unexpected time-out, something you’d not wish for. 

Manage dependencies wisely 

Dependencies (libraries and external packages) affect both cold start times and runtime performance.  

• Minimise what's included: Only add libraries you actually need. Extra packages slow things down. 
• Use managed options: Where possible, rely on Azure-managed extensions instead of bundling your own. 
• Keep packages lightweight: Avoid large or bloated libraries that increase your deployment size. 
• Review regularly: Update dependencies often to catch performance gains and security fixes. 

Use queues for cross-function communication 

For cross-function communication, use Durable Functions or Logic Apps to manage state and communication between multiple functions. If you're not using orchestration functions or logic to integrate multiple functions, it's generally best practice to use queues for cross-function communication. 

Write stateless functions 

A best practice is to write your functions as stateless functions. These should be stateless and idempotent. If needed, associate required state information with the input and output payloads. 

Code defensively 

Last but not least, code defensively. Assume that your function code might encounter an exceptional termination, so design your functions with the ability to continue from the previous fail point during the next execution. 

Keep Functions with different workloads separate 

Functions within the same Function App share the same plan and scale together. If one function experiences high traffic and scales up, all other functions in that app will scale with it – even if they don't need to. This can lead to unnecessary resource use, performance impact, and increased costs. To avoid this, group functions with similar scaling and performance needs into separate Function Apps. 

Monitor and analyse performance 

Scalability needs visibility. Keep track of how your functions behave under load: 

• Use Azure Monitor to track execution time, memory usage, and request volume. 
• Integrate Application Insights for detailed telemetry like request traces, dependencies, and exceptions. 
• Use structured logs that help you trace issues, not just dump data. Also, set up alerts. 

Closing thoughts 

We’ve discussed how Azure Functions can be a flexible and powerful tool. And like any tool, they work best when used for the right job.  

To sum it up, the trick is to know when and where it makes sense for you to use functions – and when you're forcing a serverless solution into the wrong problem. 

If your workloads are event-driven, short-lived, and scalable – Azure Functions can be a strong fit. 

And while Azure Functions may appear cheap, the overall solution cost can grow depending on how it’s integrated. Therefore, always model your entire workload, not just the compute.

Still unsure if Azure Functions are right for your setup? Serverless on Azure can be powerful — but only when your architecture supports it. 

We’ve compiled a great article for you if you’re unsure about which architecture to use when migrating to Azure.