6. Azure Cost Management, SLA (10-15%)

6.1 Methods for planning and managing costs

Factors that can affect costs (resource type, services, locations, ingress & egress traffic)

• Resource type
  • Usage meters: resource usage
• Services
  • Azure subscription types
  • Azure Marketplace
• Locations
• Zones for billing of network traffic
  • ingress & egress

Factors that can reduce costs (reserved instances, reserved capacity, hybrid use benefit, spot pricing)

• Reserved instances
• Reserved capacity
• Hybrid use benefit
• Spot pricing

Pricing calculator and Total Cost of Ownership (TCO) calculator

• Pricing calculator: estimate workload cost
  • Pricing Calculator
• TCO Calculator: helps you estimate the cost savings of operating your solution on Azure over time, instead of in your on-premises datacenter
  • TCO Calculator
  • “total cost of ownership”: includes all the hidden costs related to operating a technology capability on-premises, software licenses and hardware
  • Steps:
    1. Define your workloads: servers, databases, storage, networking
    2. Adjust assumptions
       • reusing on-premises licenses
       • specify whether you need to replicate storage to another region
       • key operating cost assumptions across several different areas vary among teams and organizations (electricity price, hourly pay rate IT support, network maintenance cost)
    3. View the report

       Azure Cost Management

• Azure subscriptions
  • Free trial
  • Pay-as-you-go
  • Member offers
• 3 ways to purchase services on Azure:
  • Through an Enterprise Agreement
  • Directly from the web
  • Through a Cloud Solution Provider
• Do’s:
  • Understand estimated costs before you deploy
  • Use Azure Advisor to monitor your usage
  • Use spending limits to restrict your spending
  • Use Azure Reservations to prepay
  • Choose low-cost locations and regions
  • Research available cost-saving offers
  • Use Azure Cost Management + Billing to control spending
    • Reporting
    • Data enrichment
    • Budgets
    • Alerting
    • Recommendations
  • Apply tags to identify cost owners
  • Resize underutilized virtual machines
  • Deallocate virtual machines during off hours
  • Delete unused resources
  • Migrate from IaaS to PaaS services
  • Save on licensing costs
    • Choose cost-effective operating systems
    • Use Azure Hybrid Benefit to repurpose software licenses on Azure

      6.2 Azure Service Level Agreements (SLAs) and service lifecycles

      Azure Service Level Agreement (SLA)

• Service-level agreement (SLA): formal agreement between a service company and the customer
  • defines the performance standards that Microsoft commits to for you, the customer
  • helps you understand what guarantees you can expect
  • the availability of the services that you use affect your application’s performance
  • some SLAs focus on other factors as well, including latency, or how fast the service must respond to a request
• Sections
  • Introduction: explains what to expect in the SLA, including its scope and how subscription renewals can affect the terms
  • General terms: contains terms that are used throughout the SLA so that both parties have a consistent vocabulary
  • SLA details: defines the specific guarantees for the service
    • typically ranges from 99.9 percent (“three nines”) to 99.99 percent (“four nines”)
• Percentages vs. Total downtime: | SLA percentage | Downtime per week | Downtime per month | Downtime per year | |—————- |——————- |——————– |——————- | | 99 | 1.68 hours | 7.2 hours | 3.65 days | | 99.9 | 10.1 minutes | 43.2 minutes | 8.76 hours | | 99.95 | 5 minutes | 21.6 minutes | 4.38 hours | | 99.99 | 1.01 minutes | 4.32 minutes | 52.56 minutes | | 99.999 | 6 seconds | 25.9 seconds | 5.26 minutes |
  • amounts are cumulative: duration of multiple different service outages would be combined, or added together
• Service credit: the percentage of the fees you paid that are credited back to you according to the claim approval process
  • you might receive a discount on your Azure bill as compensation when a service fails to perform according to its SLA

Service Level Agreements

Service lifecycle in Azure

• Service lifecycle: defines how every Azure service is released for public use
  • Development phase: Azure team collects and defines its requirements, and begins to build the service
  • Public preview phase: the public can access and experiment with it so that it can provide feedback
  • General availability (GA): after a new Azure service is validated and tested, it’s released to all customers as a production-ready service