Costs and Pricing

Question 1

What is Capital Expenditure?

Answer 1

The up front spending of money on infrastructure.

Question 2

What is Operation Expenditure?

Answer 2

The on going payments made to keep infrastructure running.

Question 3

What does CapEx stand for?

Answer 3

Capital expenditure

Question 4

What does OpEx stand for?

Answer 4

Operational expenditure

Question 5

What is the Consumption based model?

Answer 5

A model that only costs money for resources you are currently using in azure.

Question 6

What are the benefits of the consumption based model?

Answer 6

1. Better cost prediction
2. Billing is based on usage of resources
3. Prices for individual resources and services are provided separately rather than all together

Question 7

What are the factors that can affect the cost in azure?

Answer 7

1. The type of resource
2. The consumption (Pay as you go specific)
3. Maintenance of services
4. Customer type (What kind of customer are you)
5. Location/Region
6. Network and traffic
7. Subscription type
8. Reserved Instances
9. Use of Azure Hybrid Cloud

Question 8

What are the Customer types?

Answer 8

Enterprise
Web Direct

Question 9

What is an Enterprise Customer?

Answer 9

A customer that is a full company rather than an individual. They may get discounts due to negotiated annual fixed payment agreements.

Question 10

What is a Web Direct Customer?

Answer 10

A single user using Azure (Normally personal reasons). They are usually billed by usage of resources per month.

Question 11

Why might sending network traffic across billing zones incur more costs?

Answer 11

Because there can be additional fees added on when transporting data between billing zones. Think of it like a toll station.

Question 12

What does Reserved Instance mean?

Answer 12

When you commit to buying one/multi year plan for azure products. This can reduce the costs compared to pay are you go models (Sometimes up to 70%).

Question 13

What is the Pricing Calculator?

Answer 13

A prediction tool used to estimate the cost of running given Azure products/solutions.

Question 14

What are some of the things you can input into the Pricing Calculator?

Answer 14

Region
Tier
Billing options
Support options
Resources
Programs and offers
Azure dev/test pricing

Question 15

What is the Total Cost of Ownership Calculator?

Answer 15

A tool to estimate the cost savings that can by taken by migrating you on prem services/resource to azure. It compares the costs of on prem infrastructure to the cost of running azure services in the cloud.

Question 16

What are the suggested general steps for minimizing costs?

Answer 16

1. Perform costs analysis
2. Monitor usage
3. User spending limits
4. Use Azure reservations and Azure Hybrid Benefits
5. Choose low cost regions
6. Keep up to date with cost offers in azure
7. Apply tags to identify cost owners

Question 17

What is Spot pricing?

Answer 17

A pricing model that costs less then the base pay as you go model. It is used for resources (Specifically VM) that can be interrupted on a short notice and can tolerate disruptions. They won’t always run smoothly but it is cheaper.