Pricing, SLAs & Lifecycle
How Azure bills, what SLAs promise, and the tools to manage and forecast cost.
Azure is consumption-based — you pay for what you use, with factors like resource type, region, and egress bandwidth. Ways to reduce cost:
- Reserved Instances / Savings Plans — commit 1–3 years for big discounts
- Azure Hybrid Benefit — reuse existing Windows/SQL licenses
- Spot VMs — deep discounts for interruptible workloads
- Right-sizing & auto-shutdown — don’t pay for idle capacity
SLAs (Service Level Agreements) state the guaranteed uptime per service (e.g. 99.9%). Composite SLAs multiply across dependent services. Manage spend with Cost Management + Budgets and estimate with the Pricing Calculator.
Cost levers:
Reserved Instance (3yr) → up to ~72% off a steady VM
Spot VM → up to ~90% off, can be evicted
Hybrid Benefit → reuse on-prem Windows/SQL licenses
Auto-shutdown dev VMs → pay only during work hours
SLA math (services in series):
Web App 99.95% × SQL 99.99% ≈ 99.94% composite- Use the Pricing Calculator to estimate a VM + storage monthly cost.
- Explain when a Reserved Instance beats pay-as-you-go.
- Compute the composite SLA of two chained services at 99.9% each.
- Set up (or describe) a budget alert in Cost Management.
Cheat Sheet▾
| Lever | Benefit |
|---|---|
| Reserved Instances | Discount for 1–3yr commitment |
| Savings Plans | Flexible commitment discount |
| Spot VMs | Cheapest, interruptible |
| Hybrid Benefit | Reuse existing licenses |
| Cost Management | Track + budget spend |
| Pricing Calculator | Estimate before deploying |
| SLA | Guaranteed uptime % per service |
Common Interview Questions▾
How can you reduce Azure compute costs for steady workloads?
Use Reserved Instances or Savings Plans (commit 1–3 years for big discounts), apply Azure Hybrid Benefit for existing licenses, and right-size or auto-shutdown idle resources.
What does an Azure SLA represent, and what happens with chained services?
The provider’s guaranteed availability for a service (e.g. 99.9%). For services in series, multiply their SLAs — the composite is lower than any single one.