Azure FinOps Essentials

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

In this edition, we’re exploring Azure Functions and how to choose the most cost-efficient hosting option for your workloads. I’ll walk you through the different hosting plans—Consumption, Flex Consumption, Premium, and more—so you can make an informed decision. Whether you’re looking to take advantage of the generous free tier or need dedicated hardware, I’ve got you covered with tips on how to optimize both performance and cost.

Dive in and start maximizing your serverless savings today!

Cheers,
Michiel

Introduction

Azure Functions provide a serverless development experience, enabling you to focus on writing code without the complexity of managing infrastructure. With a robust set of event triggers and data bindings, Azure Functions seamlessly integrate with other Azure services. You can write functions in a variety of languages, including C#, Java, JavaScript, PowerShell, Python, and even emerging languages like Rust and Go. Supported by excellent developer tools in Visual Studio and Visual Studio Code, you can easily build, test, and monitor your functions with built-in telemetry.

Azure Functions are versatile and fit a wide range of use cases:

• Process images in blob storage and automatically resize them.

• React to HTTP triggers and return dynamic responses.

• Monitor changes in a database and respond to updates.

• Run scheduled tasks for automation.

• Handle messages in a queue for asynchronous processing.

In this edition, I'll explore the Consumption Plan, Premium Plan, and introduce the new Flex Consumption option, which offers greater flexibility for cost and performance optimization. I’ll break down the cost structure and help you choose the best option for your workload.

Hosting Options for Azure Functions

Azure Functions offer several hosting options to fit different use cases and workload requirements. Each option provides unique benefits depending on the scale, performance, and connectivity needs of your application. Here’s a breakdown of the available hosting plans:

1. Consumption Plan

The Consumption Plan is the default serverless hosting option for Azure Functions. It follows a true pay-as-you-go model, where you only pay for compute resources when your functions are running. This plan dynamically scales based on incoming events, adding or removing instances of the Functions host as needed.

Key Benefits:

• Pay only for what you use: Charges are based solely on the execution time of your functions.

• Automatic scaling: Instances are added and removed automatically based on demand, ensuring that you can handle traffic spikes without manual intervention.

• Serverless: No need to manage infrastructure or worry about idle resources; everything is managed by Azure.

This plan is ideal for applications with unpredictable or variable traffic, where functions may not need to run continuously.

2. Flex Consumption Plan

The Flex Consumption Plan offers more control and flexibility while maintaining the pay-as-you-go billing model. Unlike the Consumption Plan, it allows you to specify a number of pre-provisioned instances, reducing cold start times and offering greater scalability options. This plan also supports virtual networking for enhanced security.

Key Benefits:

• Pre-provisioned instances: Reduce cold starts by keeping some instances always ready.

• Automatic scaling: Like the Consumption Plan, it scales automatically based on the number of incoming events and per-instance concurrency settings.

• Virtual network support: Provides enhanced security and networking options, allowing you to integrate with private resources.

Flex Consumption is ideal for scenarios where cold starts are a concern, or where you require more granular control over scaling.

3. Premium Plan

The Premium Plan is designed for high-demand applications that require more powerful compute resources and additional control over scaling. This plan offers pre-warmed workers that ensure there’s no delay after periods of inactivity, making it ideal for functions that run continuously or nearly continuously.

Key Benefits:

• Pre-warmed workers: Eliminate cold starts by having workers ready to handle incoming requests at any time.

• Enhanced CPU and memory: Access more powerful compute resources compared to consumption plans, allowing for resource-intensive workloads.

• Longer execution times: Premium plans support longer execution times beyond the limitations of the Consumption Plan.

• Virtual networking: Full integration with virtual networks, providing secure connections to on-premises resources.

• Custom Linux images: Run your functions in custom containers for specialized environments or application needs.

The Premium Plan is suitable for applications with continuous or high-demand workloads, requiring low-latency performance and advanced scaling options.

4. Dedicated (App Service) Plan

The Dedicated Plan runs your functions on an existing App Service Plan. This option is ideal when you need fully predictable billing and manual control over scaling. It’s best suited for long-running workloads where the auto-scaling benefits of serverless aren’t necessary.

Key Benefits:

• Predictable billing: You pay for the App Service plan, independent of how often your functions are running.

• Manual scaling: Full control over scaling, allowing you to manually adjust the number of instances as needed.

• Multiple apps on one plan: You can run multiple web apps and function apps on the same App Service Plan, optimizing costs when you already have underutilized resources.

• High scale options: Access to larger compute sizes, especially when paired with an App Service Environment (ASE) for secure network access and compute isolation.

The Dedicated Plan works well for predictable workloads or environments where you’re already utilizing App Service Plans and want to centralize billing and resources.

5. Container Apps

The Container Apps option allows you to run your functions in containers hosted on Azure Container Apps. This option is for organizations that want the flexibility of running containerized microservices without the overhead of managing Kubernetes clusters.

Key Benefits:

• Custom libraries and containers: Package custom libraries with your function code, making it easy to support line-of-business applications.

• Cloud-native execution: Migrate code execution from legacy systems or on-premises infrastructure to containers running in the cloud.

• No Kubernetes management: Avoid the complexity of Kubernetes, while still leveraging containers for scalable, event-driven applications.

• GPU support: Access dedicated GPU resources for high-end processing power, ideal for computationally intensive workloads.

The Container Apps option is perfect for developers looking for a managed container hosting environment with minimal operational overhead and the flexibility to run diverse workloads.

Each hosting option offers a unique balance of cost, control, and scalability, making it easy to find the right plan for your specific needs. In the next section, I’ll dive deeper into the cost considerations and how to choose the most cost-effective option for your workload.

Cost Breakdown for Azure Function Hosting Options

Here’s a detailed comparison of the different pricing models for Azure Functions hosting options. Each plan provides distinct pricing structures based on how your functions consume resources, whether they require scaling, and what type of performance you need.

1. Consumption Plan

The Consumption Plan follows a pay-as-you-go model. You are billed based on the number of executions, execution time, and memory used. This plan is ideal for event-driven workloads that don’t run continuously.

Billing Details:

• Free Grant: 1 million executions and 400,000 GB-s per month.

• Execution Time: After the free grant, you’re billed $0.000016/GB-s of execution.

• Total Executions: After the free grant, you’re billed $0.20 per million executions.

The Consumption Plan offers scalability based on incoming requests, and you are only charged for the time and resources used while your functions are running. It's best suited for unpredictable traffic patterns where the function isn’t running continuously.

2. Flex Consumption Plan (In Preview)

The Flex Consumption Plan provides more flexibility with two modes: On-Demand and Always Ready. This plan enables pre-provisioned instances for reduced cold start times while maintaining the pay-as-you-go model.

Billing Details:

• On-Demand: You’re billed based on memory provisioned while the instances are actively executing functions, plus the total number of executions.

• Always Ready: You pay for the memory provisioned while instances are idle and during execution time.

• Free Grant: 250,000 executions and 100,000 GB-s per month.

This plan suits workloads that benefit from reduced cold starts and offers more control over scaling with the ability to provision always-ready instances.

3. Premium Plan

The Premium Plan offers predictable performance with no cold starts, enhanced compute power, and virtual network access. Billing is based on core seconds and memory used across pre-warmed and needed instances, with no additional execution charges. This plan is suitable for workloads that need to run continuously or that demand higher performance.

Billing Details:

• vCPU Duration: $0.173 vCPU/hour (with options for 1- or 3-year savings plans at around 17% discount).

• Memory Duration: $0.0123 GB/hour (with similar savings options for 1- or 3-year plans).

• Always Allocated: At least one instance must be allocated at all times.

The Premium Plan is ideal when you need to maintain continuous performance and require networking features like VNET access, with no cold start times.

4. Dedicated Plan

The Dedicated Plan allows you to run Azure Functions within an existing App Service Plan. This plan provides predictable billing but doesn’t offer automatic scaling unless configured in the App Service Plan.

Billing Details:

• App Service Plan Pricing: You pay for the App Service Plan the same way you would for web apps, based on instance sizes and performance tiers.

• App Service Environment (ASE): For enterprise-scale applications, ASE provides isolated environments with flat monthly rates, plus costs for App Service plan vCPUs.

The Dedicated Plan is best when you already have underutilized App Service resources or need to control costs with more predictable billing.

5. Container Apps

Azure Container Apps billing is based on your plan type and resource usage. You can package your Azure Functions into containers and run them in a fully managed environment without managing Kubernetes clusters.

Billing Details:

• Charges vary based on plan type and resources used.

• Ideal for running function apps alongside other microservices, APIs, or workflows within a containerized environment.

This plan is suitable for organizations that want to manage functions alongside container-based applications and need flexibility in handling custom libraries or larger workloads.

Conclusion

Azure Functions offers a flexible and powerful serverless solution, backed by a variety of hosting options to suit different workload needs. While these functions are "serverless," they still run on underlying hardware, meaning you’ll need to pay for the resources you use. However, by selecting the right plan, you can make a cost-efficient decision.

The Consumption Plan, with its generous free tier, is ideal for workloads with unpredictable traffic or infrequent usage. The new Flex Consumption Plan offers more control and scalability for scenarios requiring network integration or reduced cold starts. And if your workload demands dedicated hardware, the Premium Plan ensures optimal performance and features like virtual network connectivity.

Understanding your specific requirements and selecting the appropriate plan can help you balance performance and cost, ensuring that your Azure Functions deployment is both powerful and budget-friendly.

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