Azure Backup Pricing: 4 Cost Drivers and How to Cut Them (2026)

Last updated: September 2026

Microsoft Azure Backup is the online backup service built into Azure, and it protects data for organizations without any backup infrastructure of their own to run. It handles creation, management and restoration of backups for services in the Azure cloud, including virtual machines (VMs), SQL Server, and Azure file shares.

Azure Backup bills two things: a monthly fee for each protected instance, and the backup storage those instances consume. The instance fee depends on the workload and usually on size too, running from $5 a month for a small Azure VM up to $98.94 for an SAP HANA instance. Storage is billed per gigabyte, then multiplied out by your retention length, storage tier and redundancy level. There is no single number, so two environments of the same size can pay very different amounts depending on how they are configured.

This is part of a series of articles on Azure Backup

In this article:

• Which Workloads Can Be Backed Up by Azure Backup?
• What Affects Azure Backup Pricing?
• Understanding Azure Backup Pricing Per Workload
• Azure Backup Cost Optimization

Which Workloads Can Be Backed Up by Azure Backup? 

Azure Backup supports a variety of workloads to ensure comprehensive data protection. These include:

• Azure Virtual Machines (VMs): Back up entire VMs running on Azure, capturing all system states and data.
• SQL Server on Azure VMs: Protect SQL Server databases hosted on Azure virtual machines, enabling point-in-time restore capabilities.
• Azure Files: Back up file shares hosted on Azure, allowing for restoration of files and folders.
• Azure Blobs: Protect data stored in Azure Blob Storage, ensuring recoverability of object storage data.
• Azure Database for PostgreSQL: Back up PostgreSQL databases to safeguard structured data.
• Azure Database for PostgreSQL – Flexible servers: Back up flexible-server deployments, which are managed separately from single-server PostgreSQL.
• SAP HANA on Azure VMs: Back up SAP HANA databases hosted on Azure virtual machines, supporting critical enterprise applications.
• SAP ASE on Azure VMs: Back up SAP ASE (Sybase) databases running on Azure virtual machines.
• On-Premises Servers: Protect on-premises Windows and Linux machines using the Azure Backup agent or the System Center Data Protection Manager (DPM).
• Azure Disks: Protect data stored on Azure Managed Disks attached to VMs, providing consistent backup and recovery.
• Azure Kubernetes Service (AKS): Back up and restore Kubernetes clusters and their persistent volumes, ensuring the protection of containerized applications and data.
• Azure Data Lake Storage: Protect analytics data held in Data Lake Storage.
• Azure Cosmos DB: Back up Cosmos DB containers and accounts.

Related content: Read our guide to Azure SQL database backup

What Affects Azure Backup Pricing? 

Pricing in Azure Backup includes charges for the following components.

Fixed Service Cost

Azure Backup charges a monthly fee for each protected instance. The rate depends on the workload, and for most workloads it also steps up with the size of the instance: Azure VMs and SQL Server bill in 500 GB increments, Azure Blob and Azure Files bill in bands. SAP HANA backed up through Backint is the exception, charging one flat fee whatever the database size.

Storage Space

The amount of data stored and the redundancy option chosen (e.g., Locally Redundant Storage, Geo-Redundant Storage) directly influence costs. Azure storage costs are based on the amount of backup data stored after compression and encryption, with different pricing tiers for various storage options. The use of the Archive tier for long-term retention can reduce costs.

Bandwidth

Bandwidth costs may apply when transferring data to and from Azure Backup, particularly for outbound data transfers from Azure to on-premises locations or other cloud services. Inbound data transfers to Azure are generally free. However, it’s important to consider the frequency and volume of backups and restores, which can impact bandwidth charges. (Although this is a minor factor.)

• Restores: from the Standard tier are free (no egress or transaction charges). Archive-tier restores carry a one-time retrieval fee (same as Azure Blob archive retrieval). Enabling cross-region restore upgrades GRS to RA-GRS (the higher storage rate above).
• Instant Restore snapshots are billed as managed-disk snapshots (a separate line item).

Number of Protected Instances

The number of protected instances, such as virtual machines, databases, and other workloads, affects Azure Backup pricing. Each instance incurs a separate charge based on its size and type. Managing the number of active backups and removing obsolete or unnecessary instances can help control costs.

Azure Backup pricing calculator

Microsoft’s own pricing calculator covers list prices for each component. To model what an Azure Backup bill looks like against an alternative, including the storage tiering that drives most of the savings, use the Azure cost savings calculator and enter your instance count and retention.

Tips from the Expert

Adam Bertram

Adam Bertram is a 20-year veteran of IT. He’s an automation engineer, blogger, consultant, freelance writer, Pluralsight course author and content marketing advisor to multiple technology companies. Adam focuses on DevOps, system management, and automation technologies as well as various cloud platforms. He is a Microsoft Cloud and Datacenter Management MVP who absorbs knowledge from the IT field and explains it in an easy-to-understand fashion. Catch up on Adam’s articles at adamtheautomator.com, connect on LinkedIn or follow him on X at @adbertram.

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• Use lifecycle policies for automatic data transitions: Set up lifecycle management policies to automatically transition data to lower-cost storage tiers (like Archive storage) based on usage patterns and access requirements. Automating this helps ensure cost efficiency for infrequently accessed data.
• Monitor snapshots to avoid unexpected costs: Snapshots used for instant restores can accumulate quickly and result in unexpected charges. Regularly monitor and remove unneeded snapshots, as they are stored on premium storage by default and can contribute significantly to storage costs.
• Compress data before backup to reduce storage needs: For on-premises or hybrid backups, compress data before backing it up to Azure. This can reduce the amount of storage consumed and, consequently, lower storage charges, especially for data that can compress well, like text files.
• Schedule backups during off-peak hours to save on bandwidth costs: For hybrid or multi-cloud setups, schedule backups to run during off-peak hours to reduce potential network congestion and avoid premium bandwidth charges, particularly for environments where bandwidth costs are significant.
• Use incremental backup whenever possible: Incremental backups only capture changes since the last backup. This practice minimizes data transfer and storage use, significantly cutting down on both bandwidth and storage costs for dynamic workloads.

Understanding Azure Backup Pricing Per Workload

Rates verified against Microsoft’s Azure Backup pricing page in September 2026. Microsoft updates these without notice, so check the current rates before budgeting.

Azure VM backup: $5 per instance up to 50GB, $10 after that and for each additional 500GB

Here’s an overview of the pricing model for the different components of Azure Backup.

Backup Pricing for Azure VMs

Pricing for VMs is determined by the size of the backed-up data before compression and encryption. The cost varies based on the size of each protected instance: 

• For instances up to 50 GB, the cost is $5 per month plus the storage consumed. 
• For instances between 50 GB and 500 GB, the price is $10 per month plus storage. 
• For instances larger than 500 GB there is a charge of $10 for each 500 GB increment plus the storage consumed.

For example, an instance with 1.2 TB of data would cost $30 per month plus storage consumed. This charge is calculated as $10 for each of the two 500 GB increments and $10 for the remaining 200 GB.

Backup Storage Pricing

Azure Backup charges for storage in addition to the fixed charge for each VM. Backup data is stored in the Standard tier by default, with options to move long-term retention data to the Archive tier.

The Standard tier offers several redundancy options. For the Archive tier, the costs are significantly lower.

Snapshots for instant restores are charged as disk snapshots.

Azure Backup Storage Reserved Capacity Pricing

Azure Backup Storage Reserved Capacity offers significant cost savings for organizations with predictable storage needs. By committing to a one-year or three-year term, businesses can lock in lower prices. However, be aware that reserved capacity is less flexible. Once committed, it cannot be reduced or canceled without incurring penalties. Reserved capacity is available in 100 TB and 1 PB increments.

For a one-year reserved term:

• LRS: $24,222 for 100 TB/month, $236,760 for 1 PB/month
• GRS: $48,444 for 100 TB/month, $473,520 for 1 PB/month
• ZRS: $30,278 for 100 TB/month, $295,950 for 1 PB/month
• RA-GRS: $61,528 for 100 TB/month, $601,413 for 1 PB/month

For a three-year reserved term:

• LRS: $66,060 for 100 TB/month, $642,634 for 1 PB/month
• GRS: $132,121 for 100 TB/month, $1,285,269 for 1 PB/month
• ZRS: $82,575 for 100 TB/month, $803,293 for 1 PB/month
• RA-GRS: $167,805 for 100 TB/month, $1,632,406 for 1 PB/month

SQL Server on Azure VMs: $30 per instance up to 500 GB, then $30 per additional 500 GB

Pricing for backing up SQL Server VMs on Azure is determined by the size of the backed-up data before compression and encryption. Pricing for regular backup storage and reserved storage is the same as detailed above for Azure VMs. The cost per instance is as follows:

• Instances up to 500 GB: $30 per month plus the cost of storage consumed.
• Instances larger than 500 GB: $30 for each 500 GB increment plus the cost of storage consumed.

For example, if you have 1.2 TB of data in a single instance, the monthly cost would be $90 plus storage consumed. This is calculated as $30 for each of the two 500 GB increments and $30 for the remaining 200 GB.

SAP HANA on Azure VMs: $98.94 per instance via Backint, $98.40 per 5 TB via snapshot

SAP HANA is the one workload where the backup method changes the pricing model, so work out which one you are using before you estimate anything.

Backint (streaming) costs a flat $98.94 per protected instance per month plus the storage consumed, and that figure does not move with the size of the database. Microsoft’s own example: a 1.2 TB HANA database in a single instance costs $98.94, the same as a 100 GB one would. Backint backup is currently supported for scale-up deployments only, meaning one SAP HANA server in a single Azure VM.

Snapshot bills by increment instead, at $98.40 per 5 TB plus storage. A 12 TB database costs $295.20: $98.40 for each of the two full 5 TB increments, plus $98.40 for the remaining 2 TB.

The two diverge as the database grows. At 1 TB, Backint is the cheaper structure and size does not matter. At 12 TB, snapshot backup costs three times the flat Backint fee.

Azure Files backup: $5 per storage account above 250 GB, 60% of that below it

Backup for Azure Files is handled through Azure Backup’s Snapshot Management solution, which provides a seamless way to protect Azure Files. The snapshots created are stored within the user’s Storage account, and consequently, they incur snapshot storage charges rather than being moved to a separate Recovery Services Vault.

Azure Backup defines an Azure Files Protected instance as the Storage Account containing the backed-up Azure Files shares. The cost is determined based on the total size of all backed-up Azure File Shares within a Storage Account. Here’s the pricing structure:

• Instances greater than 250 GB: $5 per month
• Instances less than or equal to 250 GB: 60% of the Azure Files Protected Instances price per month

Azure Blob Storage

Azure Backup offers two ways to protect Blob Storage, and they bill very differently:

1. Operational backup is a local protection layer built on blob versioning, point-in-time restore, soft delete and the change feed. There is no instance fee and no separate backup storage charge. You pay for those underlying blob features at standard Azure Blob Storage rates.
2. Vaulted backup copies data into a Recovery Services vault and carries three charges: a protected instance fee, write transactions, and backup storage. The instance fee scales with the size of the protected storage account: 10% of the Azure Blob protected instance price under 10 GB, 30% from 10 to 100 GB, 60% from 100 GB to 1 TB, and $12.30 per month at 1 TB and above. So 1.5 TB of protected data costs $12.30 a month plus storage and transactions. Write transactions are billed per 10,000 operations and depend on redundancy: $0.057 for LRS, $0.071 for ZRS, and $0.113 for GRS.

Two limits are worth knowing before you plan around vaulted backup: the archive tier is not supported for Azure Blob backup, and neither is cross-region restore.

When does Azure Backup stop being the cheaper option?

Azure Backup’s protected-instance fee grows on two axes: how many VMs you protect, and how large each one is. A flat-rate tool grows on one. So there is a crossover point, and it arrives earlier than most teams expect.

Figures are Azure Backup protected-instance fees only. Backup storage sits on your own Azure bill under either tool. N2W Standard is flat at $249 a month for up to 20 instances of any size, so Azure Backup’s fees overtake it at 13 VMs of 1 TB, 9 at 1.5 TB, or 5 at 3 TB, and the gap widens with every VM and every terabyte after that.

Azure Backup Cost Optimization 

Here are some of the ways that organizations can optimize costs in Azure Backup:

1) Optimize Backup Policies

Companies should evaluate their backup frequencies and retention policies to align with their Azure disaster recovery needs. Backing up too much data, or keeping old backups unnecessarily, can lead to unnecessary costs.

Efficient policy management involves understanding the impact of backup schedules on costs and compliance. Regular reviews and adjustments to backup policies help ensure that backup provisions remain cost-effective and functional.

2) Review Backups for Deleted Resources

Regularly reviewing backups for deleted resources can prevent paying for unnecessary storage. Azure Backup charges for all protected instances, regardless of whether the original resource is active or deleted. Identifying and removing backups of obsolete or unused resources can cut costs.

Implementing automated scripts or using Azure policies to flag and review backups for deleted resources can simplify this process. These techniques ensure that backups are consistently relevant to the operational needs of the organization.

3) Reduce Retention Periods

Shortening backup retention periods can significantly decrease costs associated with Azure Backup. Many organizations set overly conservative retention policies, leading to excessive data storage. Aligning retention periods with legal and business requirements can optimize storage utilization and costs.

Regular audits of backup retention policies should be conducted to adapt to changing business needs and regulatory requirements. These adjustments help ensure that storage is not wasted on unnecessary backup retention.

4) Use Azure Archive Storage for Long-Term Retention

For data that needs to be retained for long periods but is rarely accessed, using Azure Archive Storage can be a cost-effective solution. Archive Storage is significantly cheaper than standard storage options and is ideal for backups that are kept for compliance or historical purposes.

Ensure that the data is appropriately classified and moved to Archive Storage based on access patterns and retention requirements. Automating this process through lifecycle management policies can streamline the transition and maintain cost efficiency.

⚠️ Archive early deletion: data moved to Archive has a 180-day minimum; deleting early is charged prorated for the remaining days.

5) Optimize Storage Redundancy Levels

Choosing the right storage redundancy option based on criticality and access needs can impact costs. Azure Backup offers different redundancy levels such as Locally Redundant Storage (LRS) and Geo-Redundant Storage (GRS). LRS is cheaper and may be sufficient for less critical data, whereas GRS provides higher availability and durability at a higher cost.

Evaluate the redundancy requirements of your backups and select the appropriate option. For non-critical data, downgrading from GRS to LRS can yield significant savings without compromising necessary protection levels.

Frequently Asked Questions

Related Content: If you also run on AWS, here’s how AWS Backup pricing compares

One N2W License Covers both AWS and Azure backup

N2W prices on how many instances you protect, not which cloud they run in. One license covers AWS and Azure together, there is no second product to buy and no per-cloud surcharge, and a VM costs the same whether it sits in EC2 or in Azure. The rate is flat per VM regardless of how much data sits behind it, so a database server holding 40 TB counts the same as an idle web server. You keep paying Azure directly for the storage your backups consume, the same as with any tool that runs inside your own tenant.

Here is where that lands differently from Azure Backup:

Low-cost per VM Azure Backup Pricing (regardless of VM size)

Unlike Azure Backup, which has a non-transparent service cost depending on the size of the VM, N2W has low, fixed service costs.

Efficient Long-term Intelligent Tiering for Azure Backups

Azure Backup also lacks the ability to choose efficient storage tiers. Azure Blob storage is not an option unless you want to implement scripting. N2W allows you to tier into optimal Azure Blob storage, giving you the ability to choose less expensive tiers compared to Azure Backup.

Forecast your Azure Savings

Automatic tiering into cheaper Azure Blob tiers, combined with flat per-VM pricing, cuts storage costs by up to 90%. You can model your own estate with our Azure cost savings calculator before you commit to anything.

Cross-Cloud from AWS to Azure

N2W allows you to back up from AWS into Azure, so the copy rests with a different provider, different credentials and a different control plane. That is a real air gap rather than a second vault inside the account that is already compromised. Immutability travels with it: N2W applies Azure’s own locked time-based retention to the copy, so no one can delete it before the retention period expires, including root.

Immutability

N2W applies Azure’s locked time-based retention to backup copies, which blocks deletion and modification until the retention period expires. That is the same no-one-can-delete-it guarantee N2W applies with S3 compliance mode on AWS, and it supports compliance requirements that call for tamper-proof retention.

Better security

For users who prioritize security and compliance, N2W supports multi-factor authentication (MFA). This feature adds an extra layer of protection to user accounts by requiring a temporary code sent via email or generated by an authenticator app. 

Improved scalability

N2W enhances scalability with features like agentless SQL backups using worker instances. This capability allows for efficient backup and recovery of SQL databases, using Azure-native snapshots. The agentless approach improves performance and scalability, ensuring that production databases are regularly backed up and can be swiftly restored. 

Understanding Azure Backup pricing and exploring cost optimization strategies are crucial for managing cloud expenses effectively. By tailoring backup policies, using archive storage, and considering third-party solutions like N2W, businesses can significantly cut costs while keeping recovery times short. Ready to take your backup strategy to the next level?

Learn more about N2W for Azure Backup