Microsoft Azure vs AWS: Cloud Services, Costs & Performance Analysis

Deciding between Azure and AWS? Azure offers lower VM costs and better Windows integration, while AWS provides a broader service catalog and more granular pricing. Both offer similar discounts (up to 90% with spot instances), but your specific workloads will determine which delivers better ROI.

• AWS offers a broader service catalog with 175+ services, while Azure provides deeper Windows integration and hybrid cloud capabilities

• Both providers offer similar discount models with reserved instances providing up to 72% savings and spot instances offering up to 90% off standard pricing

• Azure typically has lower starting costs for basic Linux VMs at $0.004 per hour compared to similar AWS offerings

• Serverless computing costs vary significantly: Azure Functions charges $0.20 per million executions after the first free million, while AWS Lambda bills based on both invocations and execution time

• Success Click Ltd comprehensive cost optimization strategies for both platforms, helping businesses maximize their cloud investment

Which Cloud Provider Saves You More Money? The Bottom Line Upfront

The Azure vs AWS pricing battle isn't straightforward - it's highly dependent on your specific workloads. For Windows-centric organizations, Azure often provides better value through licensing benefits and deeper Microsoft ecosystem integration. Meanwhile, AWS typically offers more granular service options and pricing flexibility for diverse workloads. According to Success Click, a leader in AI-driven cloud optimization, most enterprises can save 25-35% on either platform with proper architecture and commitment strategies.

Let's examine how these cloud giants structure their pricing and what it means for your bottom line.

Cloud Pricing Models Compared: Microsoft Azure vs AWS

1. Pay-As-You-Go Pricing: Azure vs AWS

Both cloud providers offer pay-as-you-go pricing, which charges users only for the resources they actually consume. Azure calls this model simply "pay-as-you-go," while AWS refers to it as "on-demand" pricing. This approach provides maximum flexibility but at the highest per-unit cost.

The key difference emerges in how they structure their base compute pricing. Azure's starting price for Linux VMs begins at $0.004 per hour, often making it more economical for basic computing needs. AWS offers a wider variety of specialized instance types with more granular pricing options tailored to specific workload profiles.

2. Reserved Capacity Options: Up to 72% Savings

For predictable workloads, both providers offer substantial discounts for commitment:

• Azure Reserved Instances: Provides discounts up to 72% compared to pay-as-you-go pricing with 1 or 3-year commitments. Azure also offers more flexibility to exchange or cancel reservations mid-term if business needs change.

• AWS Reserved Instances: Offers discounts between 30-72% with similar 1 or 3-year commitments. AWS provides additional payment options (no upfront, partial upfront, or all upfront) with increasing discount levels.

3. Spot Instance Pricing: Capturing 90% Discounts

Both platforms offer similar spot pricing models for non-critical workloads:

Azure Spot Instances provide discounts up to 90% off pay-as-you-go rates, while AWS Spot Instances offer nearly identical savings at up to 90% off on-demand prices. The key difference lies in the eviction mechanics and availability guarantees. AWS has historically had a more mature spot market with predictable interruption warnings, while Azure has been catching up with improved reliability for their spot offerings.

4. AWS-Specific Models: Savings Plans & Dedicated Hosts

AWS offers two additional pricing models not directly matched by Azure:

AWS Savings Plans: Unlike Reserved Instances that apply to specific instance types, Savings Plans provide flexibility by committing to a specific dollar amount per hour. This allows for changing instance types or moving workloads between regions while maintaining discounts of up to 72%.

AWS Dedicated Hosts: Physical servers dedicated to a single customer, providing additional compliance options and licensing benefits. While significantly more expensive than shared tenancy, they can be cost-effective for organizations with legacy license agreements or stringent isolation requirements.

5. Azure-Specific Models: Hybrid Benefits & Dev/Test Pricing

Azure counters with its own unique pricing advantages:

Azure Hybrid Benefit: Organizations with existing Microsoft licenses can convert them to cloud usage rights, reducing Azure VM costs by up to 40%. When combined with reserved instances, savings can reach 80%.

Dev/Test Pricing: Azure offers significant discounts for non-production environments, including free Windows Server licenses in dev/test subscriptions and discounts on SQL Server and other Microsoft products.

Free Services Worth Leveraging

1. 12-Month Free Offerings

Both providers offer generous 12-month free tiers for new accounts:

Azure's 12-Month Free Services:

• Linux and Windows Virtual Machines (750 hours)

• Managed Disks (64GB × 2)

• Blob Storage (5GB)

• File Storage (5GB)

• SQL Database and Cosmos DB (limited usage)

AWS's 12-Month Free Services:

• EC2 compute (750 hours of t2.micro)

• S3 storage (5GB)

• RDS database service (750 hours)

• CloudFront content delivery (50GB data transfer)

• Elastic Load Balancing

2. Always-Free Services

Both platforms provide services that remain free indefinitely, though with usage limitations:

Azure Always-Free:

• Azure Functions (1 million executions per month)

• Azure DevOps (5 users)

• Azure Kubernetes Service (cluster management)

• 5GB of bandwidth for outbound data transfer

AWS Always-Free:

• Lambda (1 million invocations per month)

• DynamoDB (25GB storage)

• Amazon SNS (1 million publishes)

• CloudWatch (10 custom metrics)

3. Free Credits & Trials

Both providers offer free credits for startups and specialized workloads:

• Azure provides $150 in credits for new accounts, plus additional credits through startup programs like Microsoft for Startups

• AWS offers $1,000 in promotional credits through its Activate program for qualified startups

Compute Service Cost Comparison

1. VM Types & Performance-to-Price Ratios

Both cloud giants offer similar VM categories, but with key differences in naming, sizing, and price-performance ratios:

Azure VM Families:

• B-series (burstable, lowest cost - starting at $0.004/hour for Linux)

• D-series (general purpose - starting at $0.096/hour)

• E-series (memory optimized - starting at $0.126/hour)

• F-series (compute optimized - starting at $0.084/hour)

• H-series (high performance computing - starting at $0.796/hour)

• L-series (storage optimized - starting at $0.624/hour)

• N-series (GPU-enabled - starting at $0.90/hour)

AWS EC2 Instance Families:

• T-series (burstable - starting at $0.0052/hour for Linux t3a.nano)

• M-series (general purpose - starting at $0.096/hour)

• R-series (memory optimized - starting at $0.132/hour)

• C-series (compute optimized - starting at $0.085/hour)

• P-series and G-series (GPU accelerated - starting at $0.95/hour)

• I-series and D-series (storage optimized - starting at $0.63/hour)

In performance benchmarks, AWS often leads in raw performance for compute-intensive workloads, while Azure typically offers better value for memory-intensive applications, particularly those using Microsoft technologies.

2. Operating System Cost Implications

Operating system choice significantly impacts your cloud bill on both platforms:

• Linux VMs are substantially less expensive than Windows VMs on both platforms (often 30-40% less)

• Azure has a pricing advantage for Windows workloads when you use Azure Hybrid Benefit

• AWS offers a broader range of Linux distributions with various cost structures

• Both providers include OS licensing in the hourly rate, with no separate license fees

3. Regional Price Variations

Prices for identical cloud resources can vary by 20-40% depending on the region they're deployed in. Generally:

• North America and Western Europe regions tend to be less expensive

• Asia Pacific, South America, and Middle East regions command premium pricing

• Specialized regions (government clouds, newly launched regions) typically cost more

For example, the same D2s v3 Azure VM costs approximately 20% more in Southeast Asia compared to US East. Similarly, an m5.large AWS instance costs about 15% more in Tokyo than in Virginia.

4. Instance Size Optimization Opportunities

Both providers offer substantial per-unit discounts for larger instances, but the discount curves differ:

• Azure offers steeper discounts as you scale up within a VM family (often 30-60% lower per-unit cost)

• AWS provides more consistent pricing across its instance size range (typically 20-40% discount for scaling up)

This creates optimization opportunities where running one large VM might be more cost-effective than multiple smaller VMs with equivalent resources. However, this must be balanced against high availability requirements and potential waste from overprovisioning.

Storage Costs Decoded

1. Block Storage Pricing Differences

For production workloads requiring persistent block storage:

• Azure Managed Disks: Priced by provisioned size in four performance tiers (Standard HDD at $0.03/GB/month, Standard SSD at $0.08/GB/month, Premium SSD at $0.13/GB/month, and Ultra Disk with custom pricing)

• AWS Elastic Block Store (EBS): Similar tiered approach with General Purpose SSD (gp3 at $0.08/GB/month), Provisioned IOPS SSD (io2 at $0.125/GB/month), and Throughput Optimized HDD (st1 at $0.045/GB/month)

Key pricing differences include:

• Azure charges a fixed price per GB for provisioned storage regardless of usage

• AWS separates storage and performance for some tiers (like gp3), allowing independent scaling

• AWS offers more performance customization options for high-end storage tiers

2. Object Storage: Blob vs S3 Costs

Both providers use tiered pricing for object storage based on total volume stored and access patterns:

• Azure Blob Storage: Offers Hot (frequently accessed) at $0.0184/GB, Cool (infrequently accessed) at $0.01/GB, and Archive (rarely accessed) at $0.00099/GB

• AWS S3: Provides Standard at $0.023/GB, Intelligent-Tiering at $0.0023/GB + monitoring fee, Standard-IA at $0.0125/GB, Glacier at $0.004/GB, and Glacier Deep Archive at $0.00099/GB

Pricing structures are similar, with both starting around $0.02-0.023/GB for hot/standard storage (first 50TB) and dropping to sub-penny levels for archive storage. However, retrieval costs and minimum storage durations differ significantly:

• Azure charges higher retrieval fees for cool and archive tiers

• AWS has longer minimum storage durations for its coldest tiers (90-180 days)

3. Archive Storage Economics

For long-term retention of rarely accessed data:

• Azure Archive Storage: $0.00099 per GB per month with variable retrieval costs based on priority

• AWS Glacier Deep Archive: $0.00099 per GB per month with 12-hour standard retrieval time

The key difference lies in the retrieval model - Azure offers more flexible retrieval options (hours to minutes), while AWS provides the lowest cost for truly cold storage when quick access isn't needed.

Serverless Computing Costs

Function Execution Pricing

The serverless pricing models reveal significant differences in how costs accumulate:

• Azure Functions: Charges $0.20 per million executions after the first million free executions

• AWS Lambda: Charges $0.20 per million requests plus compute time charges

Memory Allocation Costs

Both charge for compute time based on memory allocation:

• Azure Functions: $0.000016 per GB-second

• AWS Lambda: $0.0000166667 per GB-second

The difference appears small, but AWS rounds up duration to the nearest millisecond, while Azure rounds to the nearest 100ms, potentially leading to different actual costs for very short-running functions.

Hidden Charges & Gotchas

Serverless architectures often incur ancillary costs that can exceed the function execution costs:

• Storage costs for function code and dependencies

• API Gateway/HTTP trigger costs

• Data transfer costs between services

• Storage for logs and monitoring data

Networking Expenses That Add Up

Inbound vs Outbound Data Transfer

Both platforms follow similar patterns:

• Inbound data transfer is generally free

• Outbound data transfer is charged per GB after a small free allowance

Azure offers 5GB free outbound transfer monthly, while AWS offers 1GB per region. Beyond that, both charge around $0.08-0.09 per GB for the first 10TB, with volume discounts as usage increases.

Inter-Region Traffic Costs

Data movement between regions is a significant expense:

• Azure charges $0.02 per GB for traffic between regions in the same continent

• AWS charges $0.01-0.02 per GB depending on the specific regions involved

VPN & Private Connection Pricing

For hybrid cloud scenarios:

• Azure ExpressRoute/VPN Gateway: Starting at $0.04/hour for basic VPN, scaling up for higher bandwidth

• AWS Direct Connect/VPN Connection: Fixed monthly fee plus hourly charges for VPN connection and data transfer fees

Cost Management & Optimization Tools

Native Cost Analysis Capabilities

Both platforms offer robust cost visibility tools:

• Azure Cost Management: Provides detailed cost breakdowns by resource, subscription, resource group, etc.

• AWS Cost Explorer: Offers similar capabilities with more advanced forecasting features

Budgeting & Alerting Features

Proactive cost control tools include:

• Azure Budgets: Set budget thresholds and receive email alerts when costs approach limits

• AWS Budgets: Similar functionality with additional options for automated actions when thresholds are reached

Third-Party Cost Optimization Solutions

Beyond native tools, third-party solutions offer additional capabilities:

• Multi-cloud cost optimization

• Deeper resource rightsizing recommendations

• Automated remediation of cost inefficiencies

• Specialized FinOps reporting and governance
  

5 Proven Cost-Saving Strategies for Multi-Cloud Environments

1. Implement strict instance rightsizing processes: Regular review and adjustment of resource allocations can yield 15-30% savings

2. Use commitment discounts strategically: Use reserved instances or savings plans for steady-state workloads (60-70% of your fleet)

3. Automate spot instance usage for non-critical workloads: Use spot/preemptible instances with appropriate orchestration for 60-90% savings on eligible workloads

4. Set mandatory resource tagging policies: Ensure all resources have owner, project, and environment tags to drive accountability

5. Implement lifecycle management for data: Automatically tier storage based on access patterns and retention requirements
   

Choose Wisely: Which Provider Delivers Better ROI For Your Specific Workloads

The final decision between Microsoft Azure vs AWS should be based on your specific workload characteristics:

• Microsoft-centric enterprises: Azure typically offers better value through licensing benefits and deeper integration

• Varied workload portfolios: AWS often provides more granular services and cost-optimization opportunities

• Hybrid deployments: Azure's hybrid capabilities can reduce total cost when extending on-premises environments

• Containerized workloads: Both platforms offer competitive container pricing, with AWS having a slight edge for diverse ecosystem integrations

The key to maximizing ROI isn't just choosing the right cloud provider, but implementing proper governance, optimization practices, and ongoing monitoring to ensure you're getting the most from your cloud investment. Success Click Ltd provides expert guidance on cloud cost optimization for both Azure and AWS environments.