AZ-900 Episode 4 | Consumption-based Model | Microsoft Azure Fundamentals Course

Summary

In this episode of the Arrow Fundamentals course, Adam explains the consumption-based pricing model in Azure. He outlines how this model allows users to pay only for the resources they use, with no upfront costs. Using the example of a virtual machine, Adam explains how Azure charges based on factors like compute power, storage, and network usage, with charges being granular and based on the actual time resources are consumed. He demonstrates this using the Azure cost management portal, showing how costs fluctuate depending on service usage. The episode emphasizes the flexibility and cost-efficiency of the consumption-based model.

Takeaways

• 😀 The consumption-based pricing model in the cloud charges users only for the resources they use, with no upfront costs.
• 😀 Resources are allocated dynamically, so you only pay for what you consume and stop paying when you no longer need them.
• 😀 Cloud services, such as Azure, provide an elastic environment where resources scale based on demand.
• 😀 In Azure, services like virtual machines are priced based on several metrics such as compute power, storage, and networking.
• 😀 The cost of services can change daily based on usage, such as when the size of a virtual machine or storage usage changes.
• 😀 Azure offers granular pricing, so if you use a service for only a short period, you pay only for that specific duration.
• 😀 Azure’s cost management service allows users to analyze their subscription's consumption and costs through detailed reports.
• 😀 Users can view their costs by selecting different metrics, such as service name and daily granularity, for clearer insights.
• 😀 If you use additional services like Azure Data Break, virtual machines and storage costs may increase depending on usage.
• 😀 The model is designed to avoid paying for unused resources, helping users save costs during low-usage periods.
• 😀 Overall, the consumption-based model offers a flexible, pay-as-you-go approach that adapts to the changing demands of users' workloads.

Q & A

What is the main concept of the consumption-based pricing model in Azure?

The consumption-based pricing model in Azure means that users only pay for the resources they use. There are no upfront costs, and users are charged based on their actual consumption, whether it's compute power, storage, or other resources.

How does the Azure consumption-based pricing model differ from traditional pricing models?

Traditional pricing models often require upfront payments or long-term contracts, while the consumption-based pricing model charges users only when they use resources, ensuring that they only pay for what they need at any given time.

Can you explain how Azure’s cloud elasticity works in the consumption-based pricing model?

Azure's cloud elasticity allows users to scale resources up or down based on their demand. This flexibility ensures that users are not paying for resources they do not need, which helps prevent waste and optimizes costs.

What are some of the key pricing components that Microsoft uses for virtual machines in Azure?

The key pricing components for virtual machines in Azure include the compute power (size of the virtual machine), storage (the amount of attached storage), and additional metrics like networking. These factors influence the total cost of the virtual machine.

How are users charged for using a virtual machine in Azure?

Users are charged based on several metrics, such as the size of the virtual machine (compute power), the storage attached to it, and the network usage. If the virtual machine is used for a short time, charges are granular and based on the actual usage, even if it's only for 20 seconds.

What is the significance of Azure's cost management tool in understanding consumption-based pricing?

Azure's cost management tool helps users track and analyze their consumption-based charges. It provides detailed cost reports, including daily breakdowns by service, allowing users to monitor where their spending is coming from and make adjustments to optimize costs.

How can users analyze their costs in Azure's cost management tool?

Users can analyze their costs by selecting their subscription in the Azure Cost Management portal and using the 'Cost Analysis' feature. This allows them to view costs by service, and adjust the granularity (e.g., daily or monthly) to see how costs fluctuate over time.

Why did the speaker observe an increase in costs on June 19th?

On June 19th, the speaker used the Azure Databricks service, which created additional virtual machines. As a result, both storage and virtual machine costs increased for that day due to the additional resources being used.

What happens when usage of Azure services decreases?

When usage of Azure services decreases, the charges also decrease. This is because the consumption-based model only charges for the actual resources used, so less usage directly translates to lower costs.

How does the speaker recommend analyzing costs for better understanding?

The speaker recommends using the 'Group by' feature in the Azure Cost Management portal and selecting 'Service Name.' This enables users to break down costs by service, providing a clearer view of which services are contributing to overall charges.