Azure Landing Zone and the other 150 SKU’s

If you make an Azure migrate quote, you naturally want to give as reliable picture as possible of the expected monthly Azure costs. The greatest attention is paid to the Compute and Storage. Rightly so, because these are the largest cost items in the proposal.

However, if you look at the Azure monthly statement, there are many billing lines on the invoice of costs other than Compute and Storage. Things like network, switches, firewalls, load balancers, but also bandwidth usage, transactions, queries, etc., etc. As a result, an Azure invoice can easily consist of more than 150 SKUs.

Some of the above SKUs are related to what is called the Azure Landing Zone. A Landing zone includes all platform resources that are required to support the customer’s application portfolio and accounts for scale, security, governance, networking, and identity.

A lot of valuable time of a Solution Architect is wasted on first specifying the Landing Zone and if he or she does it in great detail is then also making an estimate of bandwidth usage and transaction volumes. The outcome of these many hours of work suggests an accuracy that is not there. There is nothing more unruly than estimating all Azure costs.

Question is can this be more practical and, above all, without unnecessary loss of time for the always overloaded Solution Architect?

During the time that I was still providing managed services myself from the various Azure platforms around the world, I discovered that all the SKUs, other than the Compute and Storage, concerned between 6% to 8% of the total Azure cost. Inquiries with a major distributor and a number of Microsoft offices confirmed this picture.

Later, I refined this further and linked this percentage to the price of the bare VMs. This is the price of an Azure VM, without an Operating System. With an average storage of 12% on bare VM costs, you have a relatively accurate estimate of all remaining monthly Azure costs.

Of course this remains an estimate and there are always situations conceivable that these extra variable Azure costs will be higher. Outband traffic in particular can become a major expense. I use 10 TB per month as a limit, above that I separate the costs in my calculations. Furthermore, the costs of a Landing Zone are relatively higher if it concerns few VMs, choose a higher percentage to make a cost estimate.

We solved this as follows in the Smart Azure Calculator:

The Azure variable cost, including the monthly Landing Zone cost, is allocated as a 12% uplift of the Compute cost. The graph then finally shows the estimated customer net monthly costs, including margins.