Azure FinOps Essentials

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

In this edition, we’re diving into Azure API Management and its various tiers to help you choose the best option for securely exposing your APIs. I’ll break down the different tiers—Basic, Standard, Premium, and the new v2 editions—so you can make an informed decision. Whether you’re looking for affordable API management for small teams or enterprise-grade solutions with VNet support, I’ve got you covered with tips on how to optimize your API strategy for both performance and cost.

Start exploring and make the most of your API management today!

Cheers,
Michiel

Introduction to Azure API Management

Azure API Management is a comprehensive platform designed to manage APIs across hybrid, multicloud environments, ensuring seamless integration and secure access. As a platform-as-a-service, it supports the entire API lifecycle, from creation and deployment to monitoring and security.

With APIs playing a vital role in digital experiences, app integration, and product development, managing them effectively has become essential. Azure API Management helps organizations securely expose services, abstract backend complexity, and optimize performance. Its key features include an API gateway for routing, security, and transformation, along with a developer portal for API discovery and onboarding.

Whether you're modernizing legacy systems, simplifying B2B integration, or enabling multi-channel user experiences, Azure API Management provides the tools to streamline and secure API consumption.

Cost Considerations for Azure API Management

For years, Azure API Management has been offered in several tiers to cater to different use cases: Consumption, Developer, Basic, Standard, Premium, and the new Isolated (Preview) tier. While all these options offer similar core features, there are some subtle differences that can influence which one you choose, depending on your needs.

The Developer and Premium tiers stand out for their Virtual Network (VNet) integration, which is crucial for secure, private API deployments. The Premium tier is necessary if you require multi-region support. On the other hand, the Basic and Standard tiers are suitable for smaller production environments, but they lack some of the advanced capabilities offered in higher tiers.

Here’s a breakdown of the key differences:

Key Highlights:

- Consumption Tier: A lightweight, serverless option ideal for small workloads or testing environments, with automatic scaling and no fixed infrastructure cost.

- Developer Tier: Designed for non-production use cases and evaluations, this tier includes VNet support, making it suitable for testing and development with private API integrations.

- Basic and Standard Tiers: Suitable for production environments, but without VNet integration. These tiers are geared towards lower and medium-volume use cases.

- Premium Tier: The most feature-rich option, with multi-region support, VNet integration, and a higher SLA (99.99%), making it ideal for large-scale, mission-critical production systems.

- Isolated (Preview) Tier: Offers full compute isolation, perfect for highly secure environments and enterprise use cases requiring complete isolation from shared infrastructure.

The New v2 Management Tiers

As previously mentioned, most users gravitate toward the Premium SKU due to its support for Virtual Network (VNet) integration, which enhances security by keeping both the API Management instance and applications inside a VNet. However, the Premium SKU can be expensive, often costing around $2.5K per month, making it less accessible for smaller projects or organizations.

To address this, Microsoft has introduced Azure API Management v2 tiers with a more attractive pricing model while still offering a good set of features. These tiers are Basic v2 and Standard v2, designed to provide flexibility for teams and organizations that want to scale their API programs but at a lower cost than Premium.

Here’s a breakdown of the key differences between Basic v2 and Standard v2:

Key Takeaways:

• Basic v2: Ideal for teams and small projects with limited API requests. It offers a lower price point but lacks VNet support. This tier includes 10 million API requests per month, with a pay-per-use model of $3 per additional million requests.

• Standard v2: Suitable for organizations looking to start or scale their API programs. This tier includes 50 million API requests per month, with a slightly lower rate of $2.50 per million additional requests. It also offers VNet support, making it more suitable for production workloads that require enhanced security and scalability, without the steep cost of the Premium tier.

With these new v2 tiers, Microsoft provides more affordable options for organizations that need flexibility and scalability without the high costs of the Premium SKU. One big benefit; they deploy much faster compared to the classic variants.

However, there are some limitations in this new v2 compared to the classic mode like zone redundancy and multi region mode. Microsoft listed these differences and limitations here.

Conclusion

Azure API Management is a robust solution for exposing and managing APIs, providing excellent gateway functionality, a developer portal, and critical security features. However, the classic tiers, while feature-rich, could become costly—especially with the Premium SKU often being the go-to choice for organizations needing VNet support and multi-region deployment. This typically resulted in a single API Management instance for the entire organization, managed by a central team, which raised issues around governance and API management.

The recent introduction of workspaces alleviates some of these management challenges by introducing a multi-tenancy layer, though it's currently only available in the Premium tier.

As you can see, selecting the right API Management tier depends on your specific needs. While the v2 tiers offer more affordable options, your choice will ultimately depend on requirements like VNet support, throughput, and regional distribution.

Thanks for reading this week’s edition. Share with your colleagues and make sure to subscribe to receive more weekly tips. See you next time!

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