Your Ultimate Guide to the Azure Pricing Calculator

Now, let’s muster up some effort and start from scratch, where we’ll manually configure it.

Estimate workload cost with Azure Pricing Calculator

This tutorial will show you how to estimate costs using the Azure Pricing Calculator.

For this example, we’ll use one of the most common things you use in compute: Virtual Machines (VMs). We estimate the cost of a Windows VM and add an application gateway.

But bear in mind: this is just a general example, so replace it with your business's actual requirements when creating your own estimate. 

For now, follow along; we promise it won’t be hard.

Step 1. Open the Azure Pricing Calculator page.

Step 2. Look for the products tab and open Virtual Machines (VMs).

Then, you’ll see the following popup in your screen in the right corner;

Next, go to the Saved Estimates tab to change the name.

Step 3. Configure the Virtual Machine (VM) settings to match your preferred specifications

We should define the metrics in the cost estimator to match the specific use case.

Let’s say you’re based in the south of the UK. Then, you would want to match the region as close as possible to you. 

But be careful: make sure to select the correct region, as it affects price and availability. Different regions have different costs, and some may not support specific services or capacities.

When you choose a region that is not aligned with your location, such as outside the country you’re in, you might find that the resource isn’t even available there.

So, for this example, we will pick UK South as this is the region we need.

So, for this example, we want these specifications:

Note: the above specifications are just used for this general example. 

Once you have set the metrics like in the example, it should look like this:

It’s utterly important to know that the instance series determines the scale and size of your cluster nodes, directly impacting performance and cost. In this specific example, we left it to all and opted for an A3 instance with 4 cores and 7 GB RAM.  

The A series VM sizes suit entry-level workloads like development, testing, small databases, and low-traffic web servers. 

If you’re new to Azure or just getting started, it may be hard to understand which VM size and series type you need. The most fitting VM size always depends on your requirements (think about CPU, memory, storage, network bandwidth, etc.). Learn more about VM sizes in Azure.

Step 4. Set usage hours

Next, you should define the number of hours this particular VM will be up for. It is set from standard to 100% since Azure takes 730 hours for one month. 

However, in this specific example, we want it to be 50% available, so we set the hours-per-month value to 365.

Step 5. Choose licencing and payment option

As you scroll down, you see the different payment options. For this particular example, we choose pay-as-you-go, which uses on-demand market pricing. We also choose to include OS licences.

As visible above, you can also choose to use Azure’s discounts, such as the Azure Savings Plan or Azure Reserved Instances.

For example, Reserved Instances can save you up to 72% over pay-as-you-go prices if you sign up for a one- or three-year term.

Azure also has flexible pricing models that let you scale resources up or down based on demand, so you only pay for what you use.

Step 6. Configure storage

We stick with the standard HDD for managed disks, but we chose S30s and will have one of those. For storage transactions, we will set the value to 10,000 a month.

Step 7. Set bandwidth and data transfer

For the bandwidth, we select the "Inter-region" option, so data can move from “South UK to West UK.” The outbound data transfer will be 50 GB. 

Step 8. Add Application Gateway

The next thing we're going to add is an application gateway. Reaccess the Azure Pricing Calculator at azure.microsoft.com. You can find it in two ways.

1. First way is to go to the networking menu and click on the Application Gateway option. 
2. Secondly, and the easiest way, is to search for it. Just type in “Application” and you should get these options.

Then, click on the application gateway and just wait for the message dialogue to open and click on view. So, we can create it again for the same region (south UK) as our VM.

We’ll leave it with the basic tier and keep the size small. Then, we change instances to 1. Again, just like in the virtual machine, we want 50 percentage less availability (half the month). So, this translates to 365 hours.

We're going to process 50 gigabytes of data, and we're going to have 50 gigabytes of outbound data transfer as well.

In the end, it should look like this:

Review the outcomes

When you scroll down, you can see the total estimated upfront costs (which we don’t have as we selected pay-as-you-go) and the estimated monthly costs for this particular example with a VM in South UK and an Application Gateway.

As you can see in the image above, you can choose different types of support and upgrade it depending on your needs. The level of support you choose (Basic, Developer, Standard, Professional Direct) directly impacts costs, with higher levels offering faster and more comprehensive service at a higher price.

Now, the licensing agreement you select (Microsoft Customer Agreement, Enterprise Agreement, New Commerce CSP, Microsoft Online Services Agreement) also influences your final costs based on the scale of your commitment and the discounts provided, with larger commitments generally offering more substantial savings.

• You can also change the currency; for this example, we used British Pounds.
• You can also export the file to Excel so you can have it offline.

We can do this process for basically anything in Azure, not just VMs.

If you need any other resources, such as a SQL database or Azure Cosmos, or if you want to look at web apps, you can use the pricing calculator to get estimates before deploying your resources. 

What to consider when using the Azure Pricing Calculator

Using the calculator may feel overwhelming, as there is a lot to consider. There is simply so much stuff you can choose from, and once you go through it, you will realise everything you need to include in an architecture.

You may not have thought of necessary security features, such as VPN gateway, Microsoft Entra External ID, etc. before.

Besides, it’s often very hard to know how many resources you need, and you may get lost in the maze of Azure’s pricing estimate tool. It’s easy to overestimate or underestimate, leading to higher costs or under-provisioned systems. 

For example: you might find that the costs are much lower than expected. You may discover that you can create cheaper clusters for specific tasks, saving even more money.

The good thing is that when you log in, you can save your estimates and return to wherever you left off, so you don’t need to do it all at once. We also recommend not doing it all at once but instead taking your time and going step-by-step through all the stuff you need to consider.

Tips when using the Azure Pricing Calculator

• Estimate creation: Choose the Azure services you want to use (e.g. VMs, storage, networking). You can add custom names to each resource so it’s easier to identify them in your estimate. For example, you might name a virtual machine “WebServer1” so it’s not confused with other VMs.
• Resource configuration: Customise each resource to your needs and situation. Also, try to provide all details you can as this will give you more accurate estimates in return. For example, when you need a high-performance VM choose a compute-optimised instance, whereas for storage, you could choose premium SSDs.
• Estimate management: When you save multiple estimates in the Azure Pricing Calculator, you can compare different scenarios and make informed decisions for your Azure costs. In specific, make separate estimates for various environments (e.g. dev, test, prod) and line them up for comparison.

When do you need the Azure Pricing Calculator?

You can use this Azure price estimator in many scenarios and use cases. Here are a few:

• Migrating to the cloud: Use the Azure Pricing Calculator to calculate the cost of your migration when doing a lift and shift – moving your on-premises infrastructure to Azure. Create an estimate for your VMs, storage and networking and try different pricing models to see what works best for your workload. For instance, you can calculate the cost of moving your database servers to Azure SQL Database and your application servers to Azure Virtual Machines.
• Scaling your workload: Imagine you notice heavy growth in your workloads. Then, you can use the Azure Pricing Calculator to calculate the cost of scaling up your infrastructure. You can create an estimate for additional VMs, storage and networking while trying different pricing models to see what works best for your workload. You might find out you need to add more VMs to handle more traffic to your web app. The tool can bring those costs to the surface.
• Optimising costs: Estimate your current workload and try different pricing models, such as reserved instances or pay-as-you-go, to see what works. Then you may find out switching to reserved instances for long-running VMs will be much cheaper.

Final Verdict

Although it’s a handy and straightforward tool, it’s not flawless.

Think about it: there are many variables, and you might not know exactly what (metrics) you need upfront.

But it’s a great starting point. 

We find it a valuable tool for estimating costs and a great way to consider resources you might have yet to think of, like security features, additional storage, or unexpected charges for things you assumed would be included at no cost.

It even highlights some services that are available for free, such as Azure Automation.

Closing thoughts

Use the Azure Pricing Calculator to help you make smart choices about your Azure spending. This way, you’ll get the most out of your cloud investment.

Try experimenting with different setups and using the calculator as a starting point for budgeting your Azure resources. Do it slowly, step by step, instead of rushing.

In the end, use the pricing estimate as guidance but do not forget to test things out with small proof-of-concept projects or trials to get a feel for how much Azure will cost.

Remember to be as specific as possible when estimating costs in the tool, as each metric changes the price. Also, always keep in mind your use case (situation, goals, and needs)