Microsoft Azure is known for its technical complexity and steep learning curve with new features released almost daily. As an Azure Cloud Solutions Provider you like the challenge, otherwise you would not be in this business. Yet, there is an aspect about all its products and features, you might like less: the complexity of its pricing, reporting and billing.

Azure’s pricing

Azure pricing depends on several factors. Combined they determine the price Microsoft charges you.

  • Huge catalogue of products

Azure offers about 15.000 SKUs. All of which have their own hourly rate.

  • Regions

All of these services are offered from 36 regions around the world (with 6 more planned). Each location has a different pricing scheme. Products available differ per region.

  • Regular price changes

Azure pricing changes daily. When billing your client you need to find the price at the moment the subscription was created or renewed.

  • New releases and features

Azure is known for its regular releases and new features, usually along with new pricing.

  • Consumption

The price also depends on different metrics: transactions, compute hours, storage capacity, availability tier, etc.

Pay attention that Microsoft may exclude some consumption from the invoice, which will appear later in its reports.

Reserved instances

On top of these price factors, Microsoft also offers reserved instances. By reserving Virtual Machines up front, Microsoft promises cost savings up to 72% versus pay-as-you-go prices. In this pricing system you pay a certain amount of data in advance to a lower price. However, unused data cannot be reclaimed. Should you use more you pay the normal price.
This is both interesting to you but also to offer to your clients, if you can make a fair estimation of the data consumption in advance.

Making up the bill

The combination of these prices entail that you cannot bill your customer default prices every month. You will need to calculate per client what they consumed, to what price, from which location and which version.

Your customer will want to visualise their Azure consumption in order to analyse trends and understand the invoice you’re sending them. Did you know Microsoft includes some consumption in their reporting, but not on the invoice they send you?

Should you make these invoices manually, this means a lot of man hours (FTE’s) and high error risk. Also invoices cannot be sent on the first of the month which means cash will come in later, while you have already paid Microsoft. Not beneficial for the cashflow.

Real time information for you and your customers

If you automate your order and billing process, you can gain insight in your purchase prices at every moment from all locations, as price changes are updated in the platform every hour.

By setting up your own pricing model, which can differ per client, you have real-time information about selling prices and margins. This will give you insight which services and clients are profitable. Reporting can be shared with stakeholders. Not just internal but also with your customers.

If you thought you had trouble understanding Azure’s pricing, what about them? Do they ask you regularly to explain the bill or their data consumption? After automation you will be able to show them exactly how much they consumed, at what price, with just one click.

That’s the service you want to provide!

Author: Laurens van Alphen, CTO Keenondots