VM pricing models in Azure - Mini Project: Build & Apply

VM Pricing Models in Azure

📖 Scenario: You are working as a cloud assistant helping a small company understand different Azure Virtual Machine (VM) pricing models. The company wants to compare pay-as-you-go and reserved instance pricing for specific VM types.

🎯 Goal: Build a simple data structure to hold VM pricing information, add a configuration for the pricing model, calculate the monthly cost based on the model, and finalize the configuration for deployment.

📋 What You'll Learn

Create a dictionary with VM types and their pay-as-you-go hourly prices

Add a variable to select the pricing model ('payg' or 'reserved')

Calculate the monthly cost for each VM type based on 730 hours per month

Add a final configuration key to indicate the pricing model used

💡 Why This Matters

🌍 Real World

Cloud architects and cost analysts often compare VM pricing models to optimize cloud spending.

💼 Career

Understanding VM pricing helps in budgeting, cost optimization, and advising clients or teams on cloud infrastructure choices.

1

Create VM pricing dictionary

Create a dictionary called vm_prices with these exact entries: 'Standard_B1s': 0.012, 'Standard_D2s_v3': 0.096, 'Standard_F4s': 0.169. These represent the pay-as-you-go hourly prices in USD.

Azure

# Create the vm_prices dictionary with exact VM types and prices
# Your code here

Hint

Use curly braces to create a dictionary with the exact keys and values.

2

Add pricing model configuration

Add a variable called pricing_model and set it to the string 'payg' to represent the pay-as-you-go pricing model.

Azure

vm_prices = {
    'Standard_B1s': 0.012,
    'Standard_D2s_v3': 0.096,
    'Standard_F4s': 0.169
}
# Set the pricing_model variable to 'payg'
# Your code here

Hint

Assign the string 'payg' to the variable pricing_model.

3

Calculate monthly VM costs

Create a new dictionary called monthly_costs that calculates the monthly cost for each VM type by multiplying the hourly price from vm_prices by 730 hours. Use a dictionary comprehension with vm and price as variables.

Azure

vm_prices = {
    'Standard_B1s': 0.012,
    'Standard_D2s_v3': 0.096,
    'Standard_F4s': 0.169
}
pricing_model = 'payg'
# Create monthly_costs dictionary using a comprehension
# Your code here

Hint

Use a dictionary comprehension with for vm, price in vm_prices.items() and multiply price by 730.

4

Add final pricing model key

Add a new key 'pricing_model' to the monthly_costs dictionary and set its value to the pricing_model variable.

Azure

vm_prices = {
    'Standard_B1s': 0.012,
    'Standard_D2s_v3': 0.096,
    'Standard_F4s': 0.169
}
pricing_model = 'payg'
monthly_costs = {vm: price * 730 for vm, price in vm_prices.items()}
# Add 'pricing_model' key to monthly_costs with value pricing_model
# Your code here

Hint

Assign the pricing_model variable to the 'pricing_model' key in monthly_costs.

Practice

1. Which Azure VM pricing model allows you to pay only for the time you use without any long-term commitment?

easy

A. Spot VMs

B. Reserved Instances

C. Hybrid Benefit

D. Pay-as-you-go

Solution

1. Step 1: Understand Pay-as-you-go model

   This model charges you based on actual usage with no upfront commitment.

2. Step 2: Compare with other models

   Reserved Instances require upfront commitment, Spot VMs can be interrupted, Hybrid Benefit is a discount on licenses.

3. Final Answer:

   Pay-as-you-go -> Option D

4. Quick Check:

   Flexible payment without commitment = Pay-as-you-go [OK]

Hint: Pay only for what you use with no upfront cost [OK]

Common Mistakes:

• Confusing Reserved Instances with Pay-as-you-go
• Thinking Spot VMs are always available
• Mixing Hybrid Benefit with pricing models

2. Which of the following is the correct description of Spot VMs in Azure?

easy

A. VMs that offer the lowest price but can be evicted anytime

B. VMs with a fixed monthly cost and no interruptions

C. VMs reserved for one year with upfront payment

D. VMs that use existing licenses for cost savings

Solution

1. Step 1: Identify Spot VMs characteristics

   Spot VMs provide the lowest price but can be interrupted or evicted when Azure needs capacity.

2. Step 2: Eliminate other options

   Fixed monthly cost applies to Reserved Instances, upfront payment is for Reserved Instances, license reuse is Hybrid Benefit.

3. Final Answer:

   VMs that offer the lowest price but can be evicted anytime -> Option A

4. Quick Check:

   Lowest cost but interruptible = Spot VMs [OK]

Hint: Spot VMs are cheap but can be stopped anytime [OK]

Common Mistakes:

• Assuming Spot VMs have fixed pricing
• Confusing Spot VMs with Reserved Instances
• Thinking Hybrid Benefit applies to Spot VMs

3. Consider you have a workload that runs continuously for 3 years. Which pricing model will most likely save you the most money?

medium

A. Pay-as-you-go

B. Reserved Instances

C. Hybrid Benefit

D. Spot VMs

Solution

1. Step 1: Analyze workload duration

   A continuous 3-year workload benefits from long-term commitment discounts.

2. Step 2: Match pricing model to workload

   Reserved Instances offer significant savings for long-term use compared to Pay-as-you-go or Spot VMs.

3. Final Answer:

   Reserved Instances -> Option B

4. Quick Check:

   Long-term continuous use = Reserved Instances [OK]

Hint: Long-term use? Choose Reserved Instances [OK]

Common Mistakes:

• Choosing Pay-as-you-go for long-term workloads
• Selecting Spot VMs for continuous workloads
• Confusing Hybrid Benefit with pricing model alone

4. You tried to deploy a Spot VM but it was evicted unexpectedly. What is the most likely reason?

medium

A. Azure needed the capacity and reclaimed the Spot VM

B. You exceeded your reserved instance quota

C. You did not apply Hybrid Benefit correctly

D. Your Pay-as-you-go subscription expired

Solution

1. Step 1: Understand Spot VM eviction

   Spot VMs can be evicted anytime Azure needs capacity for other workloads.

2. Step 2: Rule out other causes

   Reserved instance quota does not affect Spot VMs, Hybrid Benefit is unrelated to eviction, subscription expiration stops all VMs.

3. Final Answer:

   Azure needed the capacity and reclaimed the Spot VM -> Option A

4. Quick Check:

   Spot VM eviction = Azure capacity needs [OK]

Hint: Spot VMs can be stopped anytime Azure needs space [OK]

Common Mistakes:

• Blaming reserved instance quota for Spot eviction
• Thinking Hybrid Benefit prevents eviction
• Assuming subscription expiration causes eviction only

5. You want to run a batch job that can tolerate interruptions and save the most money. Which Azure VM pricing model should you choose and why?

hard

A. Reserved Instances because they offer the lowest price for long-term use

B. Pay-as-you-go because it offers flexibility without upfront cost

C. Spot VMs because they offer the lowest price but can be interrupted

D. Hybrid Benefit because it uses existing licenses to reduce cost

Solution

1. Step 1: Identify workload tolerance

   The batch job can handle interruptions, so a pricing model with possible evictions is acceptable.

2. Step 2: Match pricing model to workload needs

   Spot VMs offer the lowest price but can be interrupted, fitting the batch job's tolerance and cost-saving goal.

3. Step 3: Eliminate other options

   Reserved Instances are for long-term steady use, Pay-as-you-go is flexible but more expensive, Hybrid Benefit reduces license cost but not VM price.

4. Final Answer:

   Spot VMs because they offer the lowest price but can be interrupted -> Option C

5. Quick Check:

   Interruptible and cheap = Spot VMs [OK]

Hint: Interruptible jobs? Choose Spot VMs for best savings [OK]

Common Mistakes:

• Choosing Reserved Instances for interruptible jobs
• Confusing Hybrid Benefit with pricing model
• Ignoring interruption tolerance in choice