Azure FinOps Essentials

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Hi there, and welcome to this week's edition of Azure FinOps Essentials! 🎉

In this edition, I’m diving into a detailed comparison of AWS vs Azure from a FinOps perspective. Having worked extensively with both platforms, I’ll break down how they differ in terms of cost structures, discount plans, and tooling for cost optimization.

We’ll explore key insights, including the pricing models of AWS and Azure, reserved instance options, commitment discounts, and built-in tools to manage costs effectively. Whether you’re currently using one platform or evaluating both, this edition will give you a better understanding of how to make cost-efficient decisions.

Let’s dive into the world of cloud cost management and see how AWS and Azure stack up!

Cheers,
Michiel

A Journey from Azure to AWS

I’ve been working with Azure for as long as the platform has existed. Back when the Silverlight portal was still the norm, and many of the services that were once available are now long gone, I was there. My career has mostly revolved around helping customers transition from on-premises data centers to the cloud or starting new, greenfield projects directly in Azure. It’s been my primary cloud platform for years.

Of course, I’ve dabbled in AWS—I’ve had an AWS account for years, mostly for personal use like storing backups in Glacier, but I never used it commercially. That changed about 1.5 years ago when I took on a new assignment as part of my role as a Principal Consultant at Xebia. I was tasked with moving a traditional Windows-based application (well, actually, several of them) to the cloud. The strategic decision had already been made to use AWS, which gave me my first real, hands-on experience with Amazon's cloud platform.

In many ways, cloud is cloud—the core concepts are similar, though services have different names, and not every feature is identical. There are aspects of AWS I dislike, mainly due to my long-standing experience with Azure, but I can also see the strengths that AWS brings to the table.

So in this edition, let’s explore how these two cloud giants—AWS and Azure—stack up when it comes to cost management. Whether you're deep into Azure or just starting with AWS, understanding how both platforms approach costs can help you make better decisions for your cloud strategy.

Comparing AWS and Azure Cost Structures

When comparing the cost structures of AWS and Azure, it's clear that direct comparisons can be tricky. You can look at similar specs for Virtual Machines (VMs) in both platforms, or compare services that offer similar functionality, but the pricing differences can vary based on features, usage, and commitment. One major aspect to consider is commitment discounts, where both platforms offer options to reduce costs through reserved instances, discount plans, and long-term contracts.

Commitment Discounts: Reserved Instances & Savings Plans

Both AWS and Azure offer significant savings when you commit to using resources over an extended period, but the details differ slightly.

• AWS Saving Plans: AWS offers Saving Plans that can save you up to 72% off the regular on-demand rates. These plans require you to commit to a 1 or 3-year term and apply to EC2 (AWS’s VM equivalent), Lambda (similar to Azure Functions), and Fargate (serverless compute for containers).

  • AWS also offers Spot Instances, which can provide up to 90% savings over regular pricing. However, these come with the caveat that AWS can reclaim the capacity when needed, so they’re ideal for flexible, interruptible workloads. Tools like Xosphere or Spot Instance Advisor can help manage these workloads efficiently.

• Azure Reserved Instances: Similarly, Azure offers Reserved Instances that allow you to lock in discounted rates for VMs and other services for 1 or 3 years. However, Azure has an additional advantage with its Azure Hybrid Benefit. This allows you to bring your own licenses (e.g., for Windows Server or SQL Server) to Azure, which can result in significant savings. For instance, running SQL Server on AWS can be more expensive due to licensing costs, whereas Azure’s hybrid benefit lets you save up to 40-50% on the cost.

  • Additionally, Azure’s reserved pricing extends to services like Cosmos DB, Synapse, and other specialized services, giving more flexibility in commitment pricing across different workloads.

Pricing Tools: AWS vs. Azure Calculators

Both AWS and Azure offer pricing calculators that let you select resources, see the price breakdown, and estimate costs. These calculators are essential tools for FinOps and cost management, giving you insights into what your actual spending will look like based on usage and selected features.

• AWS provides detailed on-demand prices, which are useful if you prefer not to commit to long-term contracts upfront. This flexibility can be beneficial for companies with fluctuating workloads or short-term projects.

• Azure offers a Price Match policy where prices for certain services, like compute and storage, are aligned with AWS’s pricing every three months, ensuring competitiveness in core services.

Free Tiers

Both platforms offer free tiers to help users get started without immediate costs, though their limits vary:

• AWS Free Tier: AWS’s free tier covers a wide range of services, including 750 hours per month for EC2, 5GB of standard S3 storage, 750 hours per month of Amazon RDS usage, 1 million free requests for Lambda, and 1 million free SNS (Simple Notification Service) publishes.

• Azure Free Tier: As covered in a previous edition, Azure’s free tier also spans various services, providing access to VMs, databases, AI/ML tools, and more.

Support Plans

Both AWS and Azure offer support plans with various levels of service. Both start at around $30/month for basic support, but can scale up to enterprise-level plans:

• AWS: Support plans range up to $15K/month for enterprise-grade support.

• Azure: Azure’s support plans top out at around $1K/month, depending on your needs and service level agreements (SLAs).

While the specific numbers may vary, the key takeaway here is that both cloud platforms offer flexible pricing options and support plans, though AWS may be more complex with its range of savings plans, whereas Azure offers simplicity with competitive price matching and hybrid benefits.

AWS vs Azure – Which One Wins on Cost?

There’s no denying that AWS has been a pioneer in the FinOps space, with a large market, mature tooling, and a significant focus on cloud cost optimization. Many vendors have built sophisticated tools to address AWS’s cost management needs, and while some of these tools are multi-cloud, it’s clear that AWS was the first to face larger-scale FinOps challenges. This has pushed the ecosystem to develop more robust solutions tailored to AWS.

However, from my experience, I find Azure’s approach to cost management extremely user-friendly. The Cost Management overviews in Azure are intuitive, easy to find, and free to use. Unlike AWS, where there is a charge for accessing detailed cost data, Azure’s APIs for cost data retrieval are free. The cost dashboards and built-in tools, like Azure Advisor and the Cost Management + Billing service, make controlling costs feel seamless. Azure even integrates cost management into its development workflows through tools like Copilot, and the focus on providing actionable insights helps developers stay cost-conscious.

As a Microsoft developer, Azure feels more aligned with the way I work. It integrates smoothly with tools I’m already familiar with, such as Managed Identities and streamlined deployment options. The whole experience feels cohesive, making Azure a great choice for Microsoft-centric developers. While AWS offers similar services, my hands-on experience with Azure’s features makes it a better fit for my workflows.

Ultimately, the question of whether AWS or Azure is cheaper depends on your specific use case. Both cloud platforms provide a wide range of tools and strategies to help you maximize business value. Both offer mature solutions for discounting, both require scaling to manage cost efficiently, and both platforms encourage cleaning up waste and annotating resources for better visibility.

In the end, it’s not just about which cloud is cheaper—it’s about how effectively you use the tools available in each platform to maximize your business outcomes.

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Want more FinOps news, then have a look at FinOps Weekly by Victor Garcia