VM pricing models in Azure - Step-by-Step Execution

Process Flow - VM pricing models

Start: Choose VM

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Select Pricing Model

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Pay-As-You-Go

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Pay per usage

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Reserved Instances

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Commit 1-3 years

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Spot VMs

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Use unused capacity

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Lower cost, possible eviction

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Calculate Cost

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Deploy VM

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End

The flow shows choosing a VM, selecting a pricing model (Pay-As-You-Go, Reserved, Spot), calculating cost, and deploying the VM.

Execution Sample

Azure

Choose VM -> Select Pricing Model -> Calculate Cost -> Deploy VM

This flow models how Azure VM pricing options affect deployment cost and behavior.

Process Table

Step	Action	Pricing Model Selected	Cost Behavior	Notes
1	Choose VM size and specs	N/A	N/A	Select VM based on needs
2	Select pricing model	Pay-As-You-Go	Pay per hour of use	No upfront commitment
3	Calculate cost	Pay-As-You-Go	Higher cost if used long term	Flexible but more expensive
4	Deploy VM	Pay-As-You-Go	Charged per usage	VM runs until stopped or deleted
5	Select pricing model	Reserved Instances	Lower hourly cost	Commit 1 or 3 years upfront
6	Calculate cost	Reserved Instances	Discounted rate	Save money for steady workloads
7	Deploy VM	Reserved Instances	Charged at reserved rate	VM runs with cost savings
8	Select pricing model	Spot VMs	Lowest cost	Uses unused capacity, can be evicted
9	Calculate cost	Spot VMs	Very low cost	Best for interruptible workloads
10	Deploy VM	Spot VMs	Charged at spot rate	VM may be stopped anytime
11	End	N/A	N/A	Deployment complete

💡 All pricing models lead to VM deployment with different cost and availability trade-offs.

Status Tracker

Variable	Start	After Step 2	After Step 5	After Step 8	Final
Pricing Model	None	Pay-As-You-Go	Reserved Instances	Spot VMs	Selected model determines cost and behavior
Cost Behavior	Unknown	Pay per hour	Discounted hourly	Lowest hourly, eviction risk	Varies by pricing model
VM Availability	Not Deployed	Always available	Always available	May be evicted	Depends on pricing model

Key Moments - 3 Insights

Why does Reserved Instances cost less than Pay-As-You-Go?

Because you commit to using the VM for 1 or 3 years upfront, Azure offers a discount as shown in execution_table rows 5 and 6.

What risk comes with using Spot VMs?

Spot VMs can be evicted anytime when Azure needs capacity, as shown in execution_table rows 8 to 10.

Can you stop a Pay-As-You-Go VM anytime without penalty?

Yes, Pay-As-You-Go charges only for usage time, so stopping the VM stops charges, as shown in execution_table rows 2 to 4.

Visual Quiz - 3 Questions

Look at the execution_table, what pricing model is selected at step 6?

A Pay-As-You-Go

B Reserved Instances

C Spot VMs

D No pricing model selected

💡 Hint

Check the 'Pricing Model Selected' column at step 6 in execution_table.

At which step does the cost behavior become 'Very low cost'?

A Step 4

B Step 6

C Step 9

D Step 11

💡 Hint

Look at the 'Cost Behavior' column in execution_table for 'Very low cost'.

If you want a VM with no risk of eviction, which pricing model should you avoid?

A Spot VMs

B Reserved Instances

C Pay-As-You-Go

D All have eviction risk

💡 Hint

Check 'VM Availability' in variable_tracker for eviction risk.

Concept Snapshot

Azure VM Pricing Models:
- Pay-As-You-Go: No upfront, pay per use, flexible
- Reserved Instances: Commit 1-3 years, lower cost
- Spot VMs: Use unused capacity, lowest cost, eviction risk
Choose based on workload needs and cost trade-offs.

Full Transcript

This visual execution shows how Azure VM pricing models work. First, you choose a VM size. Then you pick a pricing model: Pay-As-You-Go, Reserved Instances, or Spot VMs. Pay-As-You-Go charges per hour with no commitment. Reserved Instances require 1 or 3 year commitment but offer discounts. Spot VMs use spare capacity at very low cost but can be evicted anytime. The execution table traces each step, showing cost behavior and deployment. Variable tracking shows how pricing model choice affects cost and availability. Key moments clarify common confusions about discounts, eviction risk, and flexibility. The quiz tests understanding of pricing model selection and cost implications. The snapshot summarizes the models for quick reference.