Cost Estimator Reference

Formulas and patterns for converting Azure unit prices into monthly and annual cost estimates.

Standard Time-Based Calculations

Hours per Month

Azure uses 730 hours/month as the standard billing period (365 days × 24 hours / 12 months).

Monthly Cost = Unit Price per Hour × 730
Annual Cost  = Monthly Cost × 12

Common Multipliers

Service-Specific Formulas

Virtual Machines (Compute)

Monthly Cost = hourly price × 730

For VMs that run only business hours (8h/day, 22 days/month):

Monthly Cost = hourly price × 176

Azure Functions

Execution Cost = price per execution × number of executions
Compute Cost   = price per GB-s × (memory in GB × execution time in seconds × number of executions)
Total Monthly  = Execution Cost + Compute Cost

Free grant: 1M executions and 400,000 GB-s per month.

Azure Blob Storage

Storage Cost   = price per GB × storage in GB
Transaction Cost = price per 10,000 ops × (operations / 10,000)
Egress Cost    = price per GB × egress in GB
Total Monthly  = Storage Cost + Transaction Cost + Egress Cost

Azure Cosmos DB

Provisioned Throughput

Monthly Cost = (RU/s / 100) × price per 100 RU/s × 730

Serverless

Monthly Cost = (total RUs consumed / 1,000,000) × price per 1M RUs

Azure SQL Database

DTU Model

Monthly Cost = price per DTU × DTUs × 730

vCore Model

Monthly Cost = vCore price × vCores × 730  +  storage price per GB × storage GB

Azure Kubernetes Service (AKS)

Monthly Cost = node VM price × 730 × number of nodes

Control plane is free for standard tier.

Azure App Service

Monthly Cost = plan price × 730 (for hourly-priced plans)

Or flat monthly price for fixed-tier plans.

Azure OpenAI

Monthly Cost = (input tokens / 1000) × input price per 1K tokens
             + (output tokens / 1000) × output price per 1K tokens

Reservation vs. Pay-As-You-Go Comparison

When presenting pricing options, always show the comparison:

| Pricing Model | Monthly Cost | Annual Cost | Savings vs. PAYG |
|---------------|-------------|-------------|------------------|
| Pay-As-You-Go | $X | $Y | — |
| 1-Year Reserved | $A | $B | Z% |
| 3-Year Reserved | $C | $D | W% |
| Savings Plan (1yr) | $E | $F | V% |
| Savings Plan (3yr) | $G | $H | U% |
| Spot (if available) | $I | N/A | T% |

Savings percentage formula:

Savings % = ((PAYG Price - Reserved Price) / PAYG Price) × 100

Cost Summary Table Template

Always present results in this format:

| Service | SKU | Region | Unit Price | Unit | Monthly Est. | Annual Est. |
|---------|-----|--------|-----------|------|-------------|-------------|
| Virtual Machines | Standard_D4s_v5 | East US | $0.192/hr | 1 Hour | $140.16 | $1,681.92 |

Tips

• Always clarify the usage pattern before estimating (24/7 vs. business hours vs. sporadic).
• For storage, ask about expected data volume and access patterns.
• For databases, ask about throughput requirements (RU/s, DTUs, or vCores).
• For serverless services, ask about expected invocation count and duration.
• Round to 2 decimal places for display.
• Note that prices are in USD unless otherwise specified.