Guide to Azure Licensing & Pricing

Gain an understanding of the pricing structure of Microsoft Azure and learn how its licensed in this blog post. 

Morten Loegstrup

Morten Loegstrup

Head of Culture and Brand

Understanding the Microsoft Azure pricing structure and how Microsoft Azure is licensed compared to classic Microsoft cloud products such as Dynamics 365, Microsoft 365, and the Power Platform, is a great first step in understanding your Microsoft Azure cost when choosing to operate in the cloud. 

Some of the most common Microsoft Azure scenarios I have seen lately are:

  • How do I compare Azure vs. AWS?
  • I am an existing Microsoft Azure user and would like to learn more about Azure pricing
  • We are evaluating a new cloud-based ERP or CRM solution and want to understand the Azure related costs of running in the cloud
  • We are in the process of going live with a Microsoft cloud-based ERP or CRM solution, but need help with Azure

If one of the above described Azure scenarios fits your current state, you should continue reading this Azure licensing and pricing blog post to help you understand how Microsoft Azure is priced, and learn about the best practicing surround these common technologies. This blog post will also help you understand the differences between Amazon’s cloud, AWS, and Microsoft’s cloud, Azure.

 

 

We all know that physical servers put away in a server room are still an occurring concept in 2020. I don’t believe it’s an over-statement to say that many profitable and success manufacturing, distribution, warehousing, food production, logistics, and other enterprise businesses still run and operate their entire business on very outdated legacy ERP and CRM solutions. In most cases, the most critical part of this of this scenario is that they are not supported- putting the company at great risk.

 

Running an older infrastructure set up has become more and more risky due to the large increase in cyber attacks. In fact, in 2018, we saw a 350% increase in ransomware attacks, a 250% increase in spoofing or business email compromise (BEC) attacks, and a 70% increase in spear-phishing attacks in companies overall. Furthermore, the average cost of a cyber-data breach on an enterprise business has risen from $4.9 million in 2017 to $7.5 million in 2018, according to the U.S. Securities and Exchange Commission.

 

Beside the increase in cyber attacks, coprorate data compliance, privacy regulations, etc., have picked up its requirements year over year. In other words, if you are running an on-premise legacy ERP and/or CRM solution, the pressure from governments and other institutions is mounting at rapid speeds, and will be costly to keep up with- especially with outdated systems.

 

Being a modern, efficient, and cost-oriented business is directly linked to how your IT infrastructure is framed, and how you store and manage your data and customer data. To comply with the increasing demand of regulations, the only answer is to move your business towards cloud computing to adapt to new times.

 

 

Microsoft Azure gives you access to cloud-based technologies- the largest cloud infrastructure in the world, as well as hundreds of products and services you can deploy with the click of a mouse, all bundled into the single product of Azure. The best part is, you do not have to worry about anything, as it’s all taken care of by automation tools.

 

When a business is preparing for their cloud transition from on-premise ERP and/or CRM solutions, may it be Microsoft Dynamics AZ4.0, AX2009, AX2012, SAP’s S/4HANA, Epicor, Sage, Oracl’e Hyperion ERP or Quickbooks, it is beneficial to first understand the different cloud costs and options available on the market. Your decision is long-term so learning to navigate the cloud world is a great foundation to that decision making process.

 

 

In this blog post, I will explain how Microsoft Azure pricing and licensing is structured based on Microsoft’s July 2020 licensing guide and information available on the Microsoft Azure website.

 

By the time you are finished reading this blog post, you should have a solid understanding of the below topics:

  • Microsoft Azure Product Overview (including pricing)
  • Differences between Azure vs. AWS
  • Azure Security
  • Azure Licensing and Pricing FAQ

Microsoft Azure is Microsoft’s cloud computing platform, available to everyone, anywhere. Microsoft Azure gives you the scalability and technology solutions needed to grow your business, and better your efficiency while staying secure and compliant.

 

In Azure, you will find hundreds of different products and services running in the cloud, ranging from Artificial Intelligence, storage, Virtual Machines, Azure machine learning, cognitive learning, Internet of Things (IoT), Azure migration, Blob storage and much more. See the full catalog on Microsoft’s Azure Services website.

Microsoft Azure Product Overview & Pricing

As mentioned above, there are hundreds of Azure products and services available for companies running their business in the Microsoft cloud, and all of these products have different price levels and tiers. This can make it very complicated to understand the price on a certain service. In this part of the blog post, we will looking into the five most popular Azure products and services, that most of Avantiico’s Microsoft Dynamics 365 customers are using to run in the cloud. 

Understanding what Azure products and services other manufacturing, distribution, franchise managements, etc. customers are taking advantage of, might give you a better idea of what you should be looking into when preparing for your move to a cloud ERP solution like Microsoft Dynamics 365. 

 

I have to say, it is almost impossible for a Gold Partner like Avantiico to give a precise number because there is a lot of dependencies and most of Azure is consumption-based, just like the electricity that runs your home.

 

Asking a Microsoft Partner “What does Azure cost” is like asking your energy provider “How much does it cost to run my house?”. The provider will first need to understand your location, the structure of your home, and the appliances you run.

 

Some key pricinples before we dive in: Azure pricing is very different from the Dynamics 365 pricing explain in the ‘Guide to Microsoft Dynamics 365 Pricing and Licensing’ post. Microsoft Power Platform pricing is also completely different from the way Microsoft Azure is priced. Now, let’s dig into the different Azure products. 

Understanding Azure Products

Azure Products allow in-house IT Admin to manage your cloud infrastructure, your developers to build customer solutions in the cloud, and deploy different Azure and Dynamics 365 applications through the global Microsoft Azure infrastructure network. Microsoft Azure is the largest cloud-based infrastructure step. It supports more than 60 regions and has more than 160 physical data centers around the globe. 

 

Some of the most popular Azure products widely used and consumed by mid to large enterprise businesses in 2020 would be:

  • Virtual Machines
  • Azure DevOps
  • Azure Active Directory
  • Azure Data Lake Storage
  • Azure Blob Storage

 

 

What Are Virtual Machines?

Virtual Machines can be created for both Linus and Windows users within seconds from the Azure Admin dashboard. Microsoft offers many different Virtual Machines including;

  • A-Series for entry-level economical VM’s for dev/test
  • Bs-Series for economical burstable VMs
  • D-Series for general purpose compute
  • DC-Series for protection of data in use
  • E-Series for optimization of in-memory hyper-threaded applications
  • F-Series for compute optimized virtual machines
  • G-Series for memory and storage optimized virtual machines
  • H-Series for high performance computing virtual machines
  • Ls-Series for storage optimized virtual machines
  • M-Series for memory optimized virtual machines
  • Mv2-Series is the largest memory for optimized virtual machines
  • N-Series for GPU enabled virtual machines

Below will give you a short explanation of the different Virtual Machines products and the cost as of July 2020 (subject to change anytime).

 

A-Series:

A-series are virtual machines that is most commonly used for entry level workloads. It is a low-cost virtual machine, that is suited for testing and smaller development tasks.

Example: A-Series virtual machines can be used to develop and low traffic server testing. It is perfect for small and medium databases that you need limited performance for.

A-Series pricing start from $11.68 per month (price may differ from Windows virtual machine’s and Linux virtual machine’s – see https://azure.microsoft.com/en-us/)

 

Bs-series:

Bs-series are virtual machines used for low CPU utilization but need the flexibility and power to accelerate the CPU utilization when needed.

Example: Bs-Series virtual machines can be used for development and testing tasks for low traffic servers and is a good fit for small databases and services.

Bs-Series pricing starts from $2.74 per month (price may differ from Windows virtual machine’s and Linux virtual machine’s – see https://azure.microsoft.com/en-us/)

D-Series:

 

With D-series virtual machines you can combine VCPU’s memory and storage. This combination will meet most production related requirements. You get better performance and faster CPU’s

 

Example: D-Series virtual machines are a good fit for enterprise applications, relational databases, memory caching, and analytics.

 

D-Series pricing starts from $41.61 per month (price may differ from Windows virtual machine’s and Linux virtual machine’s – see https://azure.microsoft.com/en-us/)

 

E-Series:

 

E-Series virtual machines is developed for customers that need to use a lot of in-memory applications such as SAP HANA. The E-Series virtual machines have great performance and memory. For more specs see https://azure.microsoft.com/en-us/pricing/details/virtual-machines/series/

 

Example: E-series are used for SAP HANA (E64s_v3 only), SAP S/4 HANA application layer, SAP NetWeaver application layer, SQL Hekaton and other large in-memory business critical workloads.

 

E-Series pricing starts from $91.98 per month (price may differ from Windows virtual machine’s and Linux virtual machine’s – see https://azure.microsoft.com/en-us/)

 

F-Series:

The F-Series virtual machines have a higher CPU-to-memory ratio. They are developed for intensive work with a lot of speed. For more specs see https://azure.microsoft.com/en-us/pricing/details/virtual-machines/series/

Example: F-Series virtual machines can be used for batch processing, analytics and heavy-duty web server traffic.

F-Series pricing starts from $35.77 per month (price may differ from Windows virtual machine’s and Linux virtual machine’s – see https://azure.microsoft.com/en-us/)

 

G-Series

The G-Series virtual machines are almost as powerful as it gets. It has twice the amount of memory and 4-times more storage than the D-Series. It is great for very demanding applications.

Example: The G-Series virtual machines can be used to handle your SQL and noSQL databases, ERP applications, SAP and data warehouse requirements.

G-Series pricing starts from $320.47 per month (price may differ from Windows virtual machine’s and Linux virtual machine’s  – see https://azure.microsoft.com/en-us/)

 

H-Series

The H-series virtual machines are built for HPC applications. Fluid dynamics and finite element analysis is perfect for the H-series virtual machines

 

Example: Companies that do finite element analysis, fluid dynamics, seismic processing, quantum simulations and other heavy workload task that require a lot of memory, speed, bandwidth and processing power, should use H-series virtual machines.

H-Series pricing starts from $581.08 per month (price may differ from Windows virtual machine’s and Linux virtual machine’s)

 

Lsv2-Series

With Lsv2-Series virtual machines you get low latency directly mapped with a local NVMe storage.  You can get up to 80 vCPUs configured hyper threaded.

 

Example: You can use Lsv2-Series for noSQL databases incl. Cassandra and MongoDB etc. Lsv2-Series is good for advanced data warehouse and if you run large database transactions

 

Lsv2-Series pricing starts from $455.52 per month (price may differ from Windows virtual machine’s and Linux virtual machine’s)

 

M-Series

M-Series virtual machines are one of Microsoft most powerful virtual machines. The M-series are perfect for in-memory workloads. SAP HANA workloads is perfect here. The M-series offer almost twice as many vCPU as the Lsv2-Series. 128 vCPU on a single virtual machine, which give you high performance.

Example: Use the M-series when you run SAP Hana, SAP S/4 HANA and other large business workloads that require a lot of computer power that runs parallel.

M-series pricing starts from $1,121.65 per month (price may differ from Windows virtual machine’s and Linux virtual machine’s)

 

N-Series

 

N-series offer you capabilities within GPU. GPU is beneficial if you need to run large graphical processes, simulation scenarios and other large virtual imaging that require power.

N-series pricing starts from $657 per month (price may differ from Windows virtual machine’s and Linux virtual machine’s)

 

What Is Azure DevOps?

Microsoft Azure DevOps is a tool made for developers by Patrick Debois and Andrew Shafter. In 2009. Azure DevOps can be used to collaborate and coordinate code development when you deploy Dynamics 365 Finance, Supply Chain, Sales, Customer Service etc. applications.

 

Azure DevOps is cloud based and Azure DevOps Servers is Microsoft on premise version. For all new Dynamics 365 deployments I would recommend the cloud version. Most developers would know Visual Studio as their on-premise development playground. It was renamed by Microsoft to DevOps Server

Azure Devops has five core services you can take advantage of in the cloud and on premise;

 

  1. Azure Repos provides Git repositories or Team Foundation Version Control (TFVC) for source control of your code
  2. Azure Pipelines provides build and release services to support continuous integration and delivery of your apps
  3. Azure Boards delivers a suite of Agile tools to support planning and tracking work, code defects, and issues using Kanban and Scrum methods
  4. Azure Test Plans provides several tools to test your apps, including manual/exploratory testing and continuous testing

Azure Artifacts allows teams to share Maven, npm, and NuGet packages from public and private sources and integrate package sharing into your CI/CD pipelines

Azure DevOps Pricing

 

When you want to purchase Azure DevOps you can purchase it either as a “user license” or as an “individual service”

 

Let’s take a look at the differences:

Azure Pricing Differences

Below are a couple of simulations from Microsoft Azure DevOps website that shows how the prices can be put together and their costs on a monthly basis.

Let’s take a look at the differences:

Understanding Azure Active Directory

Microsoft Azure Active Directory (Azure AD) is a cloud based secure identity service that gives users different access management functionalities such as single sign on and multi-factor authentication. Azure AD is the newest tool for security and access management. It is the next generation of the well-known Azure Directory

 

With Azure AD it is easier for IT Admin’s to control users and device security and application access. Azure AD is similar to what most IT Admin’s know from the Azure Directory setup.

 

Azure AD takes this approach to the next level by providing organizations with an Identity as a Service (IDaaS) solution for all their apps across cloud and on-premises.

 

For a full comparison between Azure AD and Azure Directory I recommend that you read the Microsoft documentations here – https://docs.microsoft.com/en-us/azure/active-directory/fundamentals/active-directory-compare-azure-ad-to-ad

 

A quick note – 99.9 % of online or cyberattacks are prevented using single sign-on and multi-factor authentication.

 

Summary of key capabilities:

  • Identity developer tools for integrations
  • Identity verification platform to secure internal and external access and communication
  • Single sign-on
  • Multi-factor authentication

Azure Active Directory Pricing

Microsoft Azure AD is available in a few different versions, that also have different price points:

  1. There is a free version
  2. You can get it through your Office 365 subscription
  3. The Premium P1 version
  4. The Premium P2 version

 

Let me break each version down a little bit for better understanding. If you have a Dynamics 365 Azure subscription (Sales, Finance, Field Service etc.), have purchased Microsoft Intune or a product from the Power Platform then you have access to the free version.

 

Most customers that an active Office 365 (now Microsoft 365) subscription also have the free version included in the current subscription. Microsoft 365 has many different pricing structures depending on what category you fall under “Home”, “Business”, “Enterprise” and has different names such as E1, E3, E5 and F1, all with different price points and features available.

 

The last two options to get Azure Active Directory is through an open licensing program or through the CSP program (Avantiico). Through a Microsoft partner like Avantiico, you can purchase Azure Active Directory Premium P1 which is $6 user/month or the Azure Active Directory Premium P1 costing $9 user/month. For more details around the features available in the different versions see https://azure.microsoft.com/en-us/pricing/details/active-directory/

Azure Data Lake Storage, Gen 2

If you are running big data analytics or collect data from multiple sources, you might have heard of Azure Data Lake Storage Gen1 or Gen2. Azure Data Lake Storage is built on top of Azure Blob storage (another Microsoft storage service).

 

Both comes with different storage capabilities that offer different price structures. One thing I want to point out is you have disaster recovery functionalities when you use Azure Blob Storage.

 

Azure Data Lake Storage Gen2 is a highly scalable and cost-effective data lake solution for big data analytics. It combines the power of a high-performance file system with massive scale and economy to help you spend your time to insight. Data Lake Storage

 

Azure Data Lake Storage Gen2 highlights

  • Super-fast job execution
  • Easy to scale
  • High level security and compliance features
  • Very cost effective

 

For detailed functionality explanation see – https://azure.microsoft.com/en-us/services/storage/data-lake-storage/

Azure Data Lake Storage, Gen 2 Pricing

Below are a couple of screenshots from Microsoft Azure pricing website showing you the different Data Storage prices, capacity reservations prices and transaction prices.

Azure Blob Archive Pricing

You probably saw the prices above was listed per Giga Bite (GB) per month and will be charged directly to your preferred billing method. I would highly recommend that you get a free consultation with a Microsoft Direct CSP provider like Avantiico, because our Azure licensing experts can help you understand what your consumptions might look like and what kind of Azure storage you would need operating in the cloud.

 

Most businesses will sooner or later move some of their legacy data to an archive to save $ on their cloud storage consumption. Microsoft have created their Azure Blob Archive Storage. If you move Azure Blog Storage to the Azure Blob Archive and then deleted or moved to another storage after 50 days, you will be paying for a deletion fee equivalent to 130 (180 minus 50) days of storing that blob in Archive. See below screenshot from Microsoft Azure’s pricing site and you will what the different PREMIUM, HOT, COOL, ARCHIVE pricing is.

This is just 10% of all the different pricing options you have with Azure blob Storage and Azure Data lake. Because pricing changes so rapidly I encourage you to always go to Azure Blob pricing page to read about the many different options – https://azure.microsoft.com/en-us/pricing/details/storage/blobs/. You can also contact Avantico and we will guide you through the different Azure pricing options.

Differences Between Microsoft Azure vs. Amazon AWS

When you move your business to the cloud the most dominant cloud players you can select between are Microsoft Azure or Amazons AWS cloud.

 

Below is a nonbiased comparison for the two products.

 

Accordingly, to Microsoft AWS is about 5 times more expensive than Azure for Windows Server and SQL Server based on a October 2018 pricing comparison.

 

Below photo shows the cost difference between Azure and AWS.

Above price index is based on below comparisons;

One of the most important things I want to highlight is;

  • If you want to run Microsoft Business Central or Microsoft Dynamics 365 you don’t have a choice, you have to run on Azure. “Why you might think?” The reason why you have to run in Azure is because Microsoft cannot ensure the reliability, security, privacy, compliance etc. of their product if you run in another cloud. It is like buying a BMW car, but you want a Mercedes engine, warranty probably expire very fast 

For more comparisons see Microsoft’s page around AWS vs. Azure

 

Finally to everyone that want to play around with the Microsoft Azure pricing calculator I would recommend you to check this link out – https://azure.microsoft.com/en-us/pricing/

I know this Azure pricing blog has been technical to an extent, that non-technical personas would think, “this is to complicated”.  You have nothing to worry about, because if you work with Avantiico, we will guide you through it and spare you for the technical details.

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