Azure Pricing

Price development of Azure VMs over the years

The fact is that many customers have bad experiences with the predictability of the prices of hardware and software. Unexpectedly, prices are increased after a purchase has been made. All IT suppliers are occasionally guilty of this, including Microsoft.

Hence, this deep-rooted doubt among customers about price stability is also raised when estimates are made about future Azure costs after migrate. Question then is: “Will the price of Azure not increase if I have just migrated to Azure?”

There are no guarantees about the future, but an analysis of the Azure price developments over the years does provide insight into the pricing mechanisms of Azure and thus direction about future Azure price developments, specifically for the Compute, which is often the largest cost item.

In my blog “Making easy price estimates with an aggregated Azure VM series price” I introduced the aggregated price for Azure VM series. This makes it easier to compare the different generation of VM series over the past years.

Here is an overview of the price per GBRAM for successive generations of D-series:

It clearly shows that in the last six years the prices of the D-series have been halved by the introduction of newer generations of VMs.
There are several reasons for this. The main reason is that processors become more powerful every two to three years, and with that the price of Compute falls relatively. There is also the influence of scaling up and of course the competition with the other three hyper-scale cloud platform suppliers drives down the prices.

The prices of already released D-series over years do not or hardly change. It is therefore important as an Azure user to ensure that the workloads run on the latest VMs. This means your workload is running on a more powerful VM at a lower price. This ‘migration’ can be performed via the Azure portal in a matter of minutes.

Another reason for Microsoft to make it attractive to switch to the latest VMs is that they can remove its obsolete systems in time, what saves a lot of money.

The above mentioned price development for the General Purpose category D-series also applies to the other Azure VM-series. Here is a comparison of the price development between the General Purpose series and the Memory Optimized series:

You can see that the Azure Compute prices decrease over the years. That is unique. I don’t know of any Hoster who has cut prices so drastically in recent years.

There is every reason to expect that this price development will continue in the coming years and that Azure costs will therefore decrease. This is on the condition that the customer ensures that they always run on the latest VMs.