Function pricing (consumption vs premium) in Azure - Hands-On Comparison

Function pricing (consumption vs premium)

📖 Scenario: You are setting up an Azure Function App for a small business. They want to understand the difference between Consumption and Premium pricing plans to choose the best option for their needs.You will create a simple Azure Function App configuration that shows how to set the pricing plan to Consumption first, then switch to Premium.

🎯 Goal: Build an Azure Function App configuration that starts with the Consumption plan and then updates to the Premium plan.

📋 What You'll Learn

Create an Azure Function App resource with the Consumption plan.

Add a configuration variable to specify the number of pre-warmed instances for Premium plan.

Update the Function App to use the Premium plan with the pre-warmed instances.

Complete the configuration with the correct SKU and settings for the Premium plan.

💡 Why This Matters

🌍 Real World

Azure Functions are serverless compute services used to run code on demand. Choosing the right pricing plan affects cost and performance.

💼 Career

Cloud engineers and developers must configure Function Apps correctly to optimize cost and scalability in real projects.

1

Create an Azure Function App with Consumption plan

Create an Azure Function App resource named myFunctionApp with the Consumption pricing plan. Use the SKU name Y1 to specify the Consumption plan.

Azure

# Create the Azure Function App resource with Consumption plan
# Your code here

Hint

Use azurerm_app_service_plan with tier = "Dynamic" and size = "Y1" for Consumption plan.

2

Add pre-warmed instances variable for Premium plan

Add a variable named pre_warmed_instances and set it to 1. This will be used to configure the number of pre-warmed instances in the Premium plan.

Azure

resource "azurerm_function_app" "myFunctionApp" {
  name                       = "myFunctionApp"
  location                   = azurerm_resource_group.rg.location
  resource_group_name        = azurerm_resource_group.rg.name
  app_service_plan_id        = azurerm_app_service_plan.consumption_plan.id
  storage_account_name       = azurerm_storage_account.sa.name
  storage_account_access_key = azurerm_storage_account.sa.primary_access_key
  version                    = "~4"
}

resource "azurerm_app_service_plan" "consumption_plan" {
  name                = "consumptionPlan"
  location            = azurerm_resource_group.rg.location
  resource_group_name = azurerm_resource_group.rg.name
  kind                = "FunctionApp"
  sku {
    tier = "Dynamic"
    size = "Y1"
  }
}

resource "azurerm_resource_group" "rg" {
  name     = "myResourceGroup"
  location = "East US"
}

resource "azurerm_storage_account" "sa" {
  name                     = "mystorageaccountfunc"
  resource_group_name      = azurerm_resource_group.rg.name
  location                 = azurerm_resource_group.rg.location
  account_tier             = "Standard"
  account_replication_type = "LRS"
}

# Define pre_warmed_instances variable
pre_warmed_instances = 1

Hint

Define a variable named pre_warmed_instances and set it to 1.

3

Update the App Service Plan to Premium with pre-warmed instances

Create a new App Service Plan resource named premium_plan with ElasticPremium tier and EP1 size. Use the variable pre_warmed_instances to set the pre_warmed_instance_count property.

Azure

resource "azurerm_app_service_plan" "premium_plan" {
  # Add the Premium plan configuration here
  # Your code here
}

Hint

Use tier = "ElasticPremium" and size = "EP1" in the SKU block. Set pre_warmed_instance_count to the variable pre_warmed_instances.

4

Update Function App to use the Premium plan

Update the app_service_plan_id property of the myFunctionApp resource to use the premium_plan App Service Plan resource ID.

Azure

resource "azurerm_function_app" "myFunctionApp" {
  name                       = "myFunctionApp"
  location                   = azurerm_resource_group.rg.location
  resource_group_name        = azurerm_resource_group.rg.name
  app_service_plan_id        = azurerm_app_service_plan.premium_plan.id
  storage_account_name       = azurerm_storage_account.sa.name
  storage_account_access_key = azurerm_storage_account.sa.primary_access_key
  version                    = "~4"
}

Hint

Change app_service_plan_id in myFunctionApp to use azurerm_app_service_plan.premium_plan.id.

Practice

1. Which Azure Function pricing plan charges you only when your function runs, making it ideal for infrequent tasks?

easy

A. Dedicated App Service plan

B. Consumption plan

C. Premium plan

D. Enterprise plan

Solution

1. Step 1: Understand pricing models

   The Consumption plan charges based on actual function executions, so you pay only when your code runs.

2. Step 2: Compare with other plans

   The Premium plan and Dedicated plans have fixed costs regardless of usage, making them less ideal for infrequent tasks.

3. Final Answer:

   Consumption plan -> Option B

4. Quick Check:

   Pay per use = Consumption plan [OK]

Hint: Pay only when running = Consumption plan [OK]

Common Mistakes:

• Confusing Premium plan with Consumption plan
• Thinking Dedicated plan charges per use
• Assuming Enterprise plan is standard for functions

2. Which of the following is the correct way to describe the Premium plan pricing for Azure Functions?

easy

A. Fixed cost plus charges based on usage

B. You pay only when the function runs, no fixed cost

C. Free for all usage levels

D. Charges based on number of users

Solution

1. Step 1: Identify Premium plan pricing

   The Premium plan has a fixed monthly cost plus additional charges based on how much you use it.

2. Step 2: Eliminate incorrect options

   Consumption plan is pay-per-use only, so You pay only when the function runs, no fixed cost is wrong. There is no free unlimited usage or user-based pricing.

3. Final Answer:

   Fixed cost plus charges based on usage -> Option A

4. Quick Check:

   Premium = fixed + usage cost [OK]

Hint: Premium = fixed cost plus usage charges [OK]

Common Mistakes:

• Confusing Premium with Consumption plan pricing
• Thinking Premium plan is free
• Assuming pricing depends on users

3. You have an Azure Function running on the Consumption plan that executes 1 million times a month. Which statement best describes your billing?

medium

A. You pay a fixed fee plus a small charge per execution.

B. You pay a fixed monthly fee regardless of executions.

C. You pay only for the 1 million executions plus resource usage.

D. You pay nothing because Consumption plan is free.

Solution

1. Step 1: Understand Consumption plan billing

   Consumption plan charges based on the number of executions and resource consumption, no fixed fee.

2. Step 2: Analyze options

   You pay a fixed monthly fee regardless of executions. and C mention fixed fees which do not apply to Consumption plan. You pay nothing because Consumption plan is free. is incorrect because Consumption plan is not free.

3. Final Answer:

   You pay only for the 1 million executions plus resource usage. -> Option C

4. Quick Check:

   Consumption = pay per execution [OK]

Hint: Consumption plan charges per execution only [OK]

Common Mistakes:

• Assuming fixed monthly fee on Consumption plan
• Thinking Consumption plan is free
• Mixing Premium plan billing with Consumption

4. You deployed an Azure Function on the Premium plan but noticed unexpectedly high costs. What is a likely cause?

medium

A. Premium plan has a fixed cost plus usage, so fixed cost adds even if usage is low.

B. Premium plan is free for the first 1 million executions, so costs should be zero.

C. You forgot to enable the Consumption plan, so you are charged double.

D. You are charged only when the function runs, so high usage caused high cost.

Solution

1. Step 1: Understand Premium plan cost structure

   Premium plan includes a fixed monthly cost plus charges based on usage.

2. Step 2: Identify cause of high costs

   Even if usage is low, the fixed cost applies, which can cause unexpectedly high bills.

3. Final Answer:

   Premium plan has a fixed cost plus usage, so fixed cost adds even if usage is low. -> Option A

4. Quick Check:

   Premium fixed cost causes base charges [OK]

Hint: Premium plan always has fixed cost component [OK]

Common Mistakes:

• Thinking Premium charges only on usage
• Confusing Consumption plan with Premium
• Assuming Premium plan is free for some executions

5. You expect your Azure Function to have steady, high traffic with occasional spikes. Which plan should you choose to optimize cost and performance?

hard

A. Free tier, because it handles high traffic without cost

B. Consumption plan, because it charges only when functions run

C. Dedicated App Service plan, because it has no scaling limits

D. Premium plan, because it offers pre-warmed instances and scales smoothly

Solution

1. Step 1: Analyze workload pattern

   Steady high traffic with spikes needs consistent performance and quick scaling.

2. Step 2: Match plan features

   Premium plan provides pre-warmed instances to avoid cold starts and scales smoothly, fitting this pattern well.

3. Step 3: Eliminate other options

   Consumption plan may have cold starts causing delays. Dedicated plan is costly and less flexible. Free tier cannot handle high traffic.

4. Final Answer:

   Premium plan, because it offers pre-warmed instances and scales smoothly -> Option D

5. Quick Check:

   Steady high traffic = Premium plan [OK]

Hint: Steady high traffic? Choose Premium for performance [OK]

Common Mistakes:

• Choosing Consumption plan despite cold start delays
• Assuming Dedicated plan is best for all cases
• Thinking Free tier supports high traffic