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Azure Backup – Announcing new pricing model for TCO reduction

Today, we are announcing three key changes to Azure Backup that significantly decreases the TCO for customers storing backups in Azure.

In February 2015, Azure Backup announced new functionality that increased the retention range and provided greater flexibility to customers while creating their retention policies. These were key steps in the journey towards making Azure the preferred choice for storing backup data and replacing tapes.

Today, we are announcing three key changes to Azure Backup that significantly decreases the TCO for customers storing backups in Azure:

  1. A new pricing model based on the number of machines being backed up
  2. All backup data (long term and short term) billed on Block Blob storage prices
  3. Choice of Locally Redundant Storage (LRS) or Geo-Redundant Storage (GRS) for the backup data

This makes the new pricing economical for machines of all sizes – from small laptops to enterprise grade servers. The new pricing is also attractive to Azure Backup customers using long term retention, with the benefits storing data on Block Blob storage adding up over time.


Understanding the new pricing

The new pricing model consists of two parts:

  1. A software management cost based on the number of machines that are backed up. This is measured and reported in the monthly Azure bill as Protected Instances. The management fee also depends on the size of the machine being protected.
  2. The cost of backup storage based on the amount of backup data stored in Azure.
For small instances of size up to 50GB, the customer is billed $5. Between 51GB and 500GB, the customer is billed $10. And for instances larger than 500GB, the customer is charged $10 for every 500GB increment. Additionally, the customer pays for LRS or GRS Block Blob storage consumed to retain the backup data. Most importantly, there are no charges for restores or network egress during restores. Plus the cost of storage transactions is not charged for either. Azure Backup Pricing change summary

As with the older pricing model, the Protected Instance model does not charge customers for restoring data from Azure Backup or for network egress and storage transactions.

NOTE: You will need to upgrade to the latest Azure Backup agent to avail the benefits of the new pricing.

1. Getting to know Protected Instances better

The first important change relates to the notion of Protected Instances, and what this means to the Azure Backup bill and the new pricing pivots around the machines that you protect. There are three major categories of machines that are backed up using Azure Backup:

  1. Virtual machines – these could be Hyper-V virtual machines or Azure IaaS virtual machines. The guest operating system could be Windows or Linux.
  2. Windows Server machines with an application or workload that needs to be backed-up. Common workloads are: Microsoft SQL Server, Microsoft Exchange, Microsoft SharePoint, Microsoft Dynamics, and the File Server role of Windows Server. The Windows Server OS can be deployed on a physical host or inside a virtual machine as the guest OS.
  3. Windows client machines

The Azure Backup bill will depend on the number of each of the machines (listed above) that are backed up. However, the size of the machine also plays a role – the larger the machine, the larger the bill. So a virtual machine of 500GB in size will be charged $10, while a virtual machine of 2000GB in size will be charged $40. These machines backed up using Azure Backup show up on the monthly bill as Protected Instances. Learn more about Protected Instances from the Azure Backup pricing FAQ.

This applies to machines backed-up through Data Protection Manager (DPM) as well. Although the DPM server acts as a conduit for backup data flowing to Azure, you will be billed based on the machines that DPM is protecting. For example, if 5 Hyper-V virtual machines each having size 100GB are backed-up to Azure Backup via an on-premises DPM server, then you will be billed $10 for each of the 5 virtual machines. Read more about it on the DPM blog.

2. Highly economical backup storage – Azure Block Blob

The second important change relates to the type of storage used for Backup. Azure Backup now bills customers for storage usage separately on the cheapest storage Azure provides today – Block Blobs. This is an enormous step towards cost-effective backups using cloud storage. However this doesn’t change the user experience in any way – continue to use the Azure Backup workflows as you do today and automatically enjoy the storage-side benefits.

3. Storage redundancy options for backup data – LRS and GRS

The third change relates to a choice that makes a lot of sense for long term retention customers. Customers looking to lower their storage costs now get an option to chose LRS instead of the default GRS. This is choice is great for customers looking to replace data on tapes with just one copy in Azure.

Choosing the storage redundancy is a simple step at the time of vault creation – pick the redundancy of your choice from the Configure tab in the backup vault. Learn more about choosing the storage redundancy from the Azure Backup documentation.


Comparing the old and new pricing for a 100GB virtual machine

All customers protecting data to Azure Backup can expect to see some level of savings with the new model – whether the data is coming from Data Protection Manager (DPM) or from Azure Backup agents directly on Windows Servers and clients. However, the biggest savings will be for customers keeping data in Azure Backup for long term retention.

A simple example will illustrate the savings with the new pricing model. Take a virtual machine of size 100GB – inclusive operating system and data disks. The backup and retention policy is:

  • Daily backup of the virtual machine to disk and to Azure. The daily churn is assumed to be 1%, i.e. 1GB of additional data is backed up to Azure each day.
  • The backup recovery points are retained for an entire year. Thus at the end of the year there will be 365 recovery points to restore from.
  • The storage redundancy chosen is LRS.
Cost comparison between Per-GB and Protected Instance models. Savings of 77% are seen by the end of 1 year. Azure Backup – TCO comparison

The Protected Instance pricing model results in savings in the Azure Backup bill starting from the first month itself. By the end of the year with 360 recovery points, customers get savings of 77% with the Protected Instance based pricing when compared to the $0.2/GB pricing model.


Learn more and Explore

  • The Azure Backup pricing page has more details on the new model with an exhaustive FAQ.
  • In order to estimate your bill with the new model, use the pricing calculator. If you need more flexibility you can also download and use an excel sheet to fine tune the parameters that impact the Azure Backup bill.
  • DPM customers can estimate their usage by running a simple PowerShell script on the DPM server. The script provides details on the Protected Instances and the monthly backup data stored in Azure. Along with the pricing calculator or excel sheet, the Azure Backup bill can be estimated.

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