Azure Virtual Machines – Cost Management

Understand Your VM Costs

Azure Virtual Machines (VMs) provide flexible compute resources. Effective cost management helps you optimize spend, forecast budgets, and ensure you’re only paying for what you need.

Pricing Overview

Budgeting & Forecasting

Use Azure Cost Management + Billing to set budgets, receive alerts, and visualize monthly spend.

• Budget Alerts: Define thresholds (e.g., 70%, 90%) and receive email/webhook notifications.
• Cost Forecast: Predict spend based on historical usage with a 95% confidence interval.
• Tagging Strategy: Tag resources (e.g., environment, project) to attribute costs accurately.

Sample ARM Template for Tagging

{
  "$schema": "https://schema.management.azure.com/schemas/2019-04-01/deploymentTemplate.json#",
  "contentVersion": "1.0.0.0",
  "resources": [
    {
      "type": "Microsoft.Compute/virtualMachines",
      "apiVersion": "2023-03-01",
      "name": "myVM",
      "location": "[resourceGroup().location]",
      "tags": {
        "Environment": "Production",
        "CostCenter": "CC1234"
      },
      "properties": {
        "hardwareProfile": {"vmSize": "Standard_D2s_v3"},
        "storageProfile": {"imageReference": {"publisher":"Canonical","offer":"UbuntuServer","sku":"18.04-LTS","version":"latest"}},
        "osProfile": {"computerName":"myVM","adminUsername":"azureuser","adminPassword":"P@ssw0rd!"},
        "networkProfile": {"networkInterfaces": [{"id": "[resourceId('Microsoft.Network/networkInterfaces','myNic')]" }]}
      }
    }
  ]
}

Tools & APIs

Integrate cost data into your own dashboards or automation pipelines.

• Cost Management REST API
• Azure CLI (az costmanagement)
• Power BI Connector

Frequently Asked Questions