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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
| Period | Hours | Calculation |
|---|---|---|
| 1 Hour | 1 | Unit price |
| 1 Day | 24 | Unit price × 24 |
| 1 Week | 168 | Unit price × 168 |
| 1 Month | 730 | Unit price × 730 |
| 1 Year | 8,760 | Unit price × 8,760 |
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.