One of my most frequently asked questions is “how to price an Azure solution?”. I must get asked at least 3 times a week, often more. It’s a task that everyone who begins their journey to Microsoft Azure must go through and it is easier than you think.
Change of mindset required
Many Microsoft partners have been very successfully selling and deploying Office 365 as a cloud productivity solution for their customers for several years. It’s well understood that the services of Office 365 are collected into plans (i.e. Business Essentials, Enterprise E1, etc.) and sold per user, per month. There is no fluctuation in cost, it’s simple. If you need E3 for 30 users then the total cost is 30 * <whatever you’ve been quoted as the licence cost>.
In the Azure world, pricing is fundamentally different. At the headline level, we switch from paying a flat fee, regardless of your usage, to a model where you only pay for what you consume. If you use more, you pay more. If you use less, you pay less. There is no concept of an Azure Enterprise E1 plan. With this in mind, it’s important to understand how solutions are constructed, how they’re likely to be used, and therefore how to build a pricing estimate to help illustrate how much it may cost to run.
Tools to help price an Azure solution
To make it easier to price an Azure solution, Microsoft has produced two tools that’ll help you get started. There are also great tools from some Microsoft partners that can take you to the next level of detail.
The Azure Pricing Calculator
This simple tool, based on a familiar shopping cart experience is free to access and is available online. You can easily take your technical design for an Azure solution and build it in the tool to get an estimate in a relevant currency. You can export the estimate as an Excel spreadsheet for offline analysis.
It’s great for understanding the potential cost savings that can be realised by optimising IT operations; for example, by not running workloads 24×7 but instead turning them off or down-sizing them outside of working hours. You don’t need any deep technical expertise to use the tool, either. All you need to know is the high-level detail of which services will be used in your solution design – no need to worry about how they’re technically provisioned or configured. This makes it an easy tool to use with sales teams who don’t have the same technical depth of knowledge of the Azure platform, but who need to be able to create rough estimates.
The Azure Total Cost of Ownership Tool
http://tco.microsoft.com | Free
It’s easy to forget that there’s more to running an on-premises IT environment than just the cost of the virtual machine, or platform. IT labour costs, electricity, hardware, etc. all should be included in any comparison to running infrastructure in the cloud. The TCO tool, also free and available online, provides a good depth of detailed comparison between an on-premises world and one powered by Azure in the form of a 3 year TCO report. Like the pricing calculator, this report can be exported to an Excel spreadsheet for offline analysis.
The TCO tool is a powerful addition to any kitbag as it clearly and simply highlights the major differences between hosting yourself and leveraging the power and scale of Azure. Return on investment is important to every customer as is reducing the underlying costs associated with running their business. A well-built TCO report can be the difference between winning an opportunity, and losing out to a competitor (even if that means the customer staying put).
You can spend quite a while inputting a vast amount of detailed data points to the tool. The more realistic the data, the more accurate the report. To help you get started, the tool is already populated with some assumptions.
HealthCheck for Azure
https://www.bittitan.com/products/healthcheck-azure | Paid, third-party tool.
The HealthCheck for Azure toolset is perfectly suited to helping you demonstrate the ROI of moving to Azure through detailed and accurate reporting. It provides great insight, highlighting things such as dependencies between nodes and apps, optimal migration settings, etc. and ultimately helps you de-risk a move to the cloud by having a clear understanding of your customer’s existing environment.
Practice makes perfect
The three tools in this post are just some of the resources available to help with gaining an understanding of how Azure works, how to price it and build a migration plan. Microsoft has also recently made available a variety of online training materials to complement your professional development and help you get on the path to certification.