Azure Storage Cost Factors, Pricing Examples, and Optimization Tips

What Is Azure Storage? 

Azure Storage offers scalable, durable cloud storage solutions for various data types, including unstructured, semi-structured, and structured data. It supports use cases like backups, archiving, big data analytics, and content distribution. 

Azure Storage is integrated within Microsoft Azure, offering security features, high availability, and consistent performance regardless of scale. The platform ensures data integrity via multiple copies across data centers and provides integration with Azure services.

Users benefit from Azure Storage’s global availability, supporting multiple redundant and geographically distributed locations. This allows organizations to store and access their data closer to users, reducing latency and improving performance. Azure also offers tools and SDKs for popular programming languages, enabling easy integration and management.

This is part of a series of articles about Azure backup

In this article:

• Factors Affecting Azure Storage Costs
• Azure Storage Pricing Overview
• Azure Storage Pricing Examples
• 5 Best Practices to Optimize Azure Storage Costs

Factors Affecting Azure Storage Costs 

Azure Storage costs are influenced by multiple factors such as selected storage tiers (Hot, Cool, Archive), data redundancy options (LRS, GRS, ZRS, RA-GRS), and frequency of data transfers and operations.

Storage Tiers

Azure Storage offers different tiers to match data access patterns and cost requirements. The Hot tier is optimal for frequently accessed data, while the Cool tier targets infrequently accessed, longer-lived data at reduced rates. Archive storage provides the lowest cost for rarely accessed data, suitable for compliance and archival scenarios.

Selecting the appropriate tier is crucial for cost efficiency and performance. While the Hot tier offers high access speed, it comes with higher storage costs. Data moved to cooler tiers benefit from cost savings but might incur retrieval fees.

Data Redundancy Options

Azure offers multiple data redundancy options to ensure high availability and disaster recovery. LRS (locally redundant storage) keeps data within a single region, suitable for cost-sensitive scenarios. GRS (geo-redundant storage) replicates data to a secondary region, improving data durability.

RA-GRS (read-access geo-redundant storage) adds read-access capabilities to secondary locations, improving availability. ZRS (zone-redundant storage) ensures durability across availability zones, suitable for intraregional high-availability needs. Each option comes with different costs—with more redundancy resulting in a higher charge per storage unit.

Data Transfer and Operations Charges

Data transfer and operations within Azure Storage incur additional costs, influencing overall expenses. Egress fees apply when data leaves Azure regions, and frequent operations like write/read requests result in higher charges.

Optimizing data throughput, minimizing egress, and employing bulk operations can reduce costs significantly. Leveraging Azure’s built-in cost management tools can help monitor these factors, providing insights to refine data operations.

Storage Account Types

Selecting the appropriate Azure Storage account type impacts performance and cost. General-purpose v1 accounts offer basic features, while v2 accounts include improved services with cost-efficient options. Each type supports different workloads, influencing how charges accumulate based on service consumption.

Utilizing v2 accounts can benefit from improved scalability, more affordable pricing tiers, and access to newer Azure services. Microsoft recommends upgrading to v2, but continues to support v1 and provide security upgrades, so legacy workloads can continue using them. Understanding feature sets and pricing models between account types helps optimize resource use and manage total costs.

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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• Leverage intelligent data partitioning: Analyze the data and split it into partitions based on access patterns, data types, or lifecycle. This improves retrieval efficiency and enables precise tiering, reducing overall costs.
• Bundle egress traffic: Reduce data transfer costs by consolidating outbound data transfers. Design workflows that send data in bulk rather than in frequent small chunks, minimizing egress charges.
• Implement soft delete and versioning with caution: While these features protect data from accidental deletion, they can significantly increase storage consumption. Regularly review and prune old versions to avoid unnecessary costs.
• Use Azure Premium storage judiciously: Premium storage tiers offer high performance but are costly. Limit their use to workloads that genuinely need low latency, such as databases or critical application logs, and move less critical data to lower-cost tiers.
• Optimize blob block size: Adjust blob block sizes based on the application’s throughput and latency requirements. Inefficient block sizes can lead to higher transaction costs and degraded performance.

Azure Storage Pricing Overview 

Azure Storage provides a variety of pricing models for different storage needs. Below is a summary of key Azure storage types and their starting prices:

Azure Storage Pricing Examples

Here are a few examples illustrating typical costs of Azure Storage services. Note that Azure pricing is subject to change, for up-to-date pricing and additional options see the official pricing page. 

Azure Blob Pricing

Azure Blob Storage pricing depends on storage tiers, redundancy options, operations, and data transfer fees. Here’s a breakdown of key factors:

Storage Costs

Prices per GB/month vary based on the tier:

• Premium: $0.18 per GB
• Hot: $0.018 per GB (First 50 TB)
• Cool: $0.01 per GB
• Cold: $0.00443 per GB
• Archive: $0.002 per GB

Operations and Data Transfers

• Write Operations (10K): $0.0273 (Premium), $0.065 (Hot), $0.13 (Cool), $0.288 (Cold)
• Read Operations (10K): $0.0022 (Premium), $0.005 (Hot), $0.013 (Cool)
• Data Retrieval Fees: Free for Hot/Cool tiers, $0.0369/GB for Cold, and $0.02/GB for Archive (high-priority).

Early Deletion Penalty

Archive and Cold tiers require minimum storage durations (180 and 90 days, respectively), with early deletion charges based on unused days.

Using tier transitions and optimizing read/write patterns can help reduce costs, particularly by leveraging Archive for long-term storage needs and Hot for frequently accessed data.

Azure Files Pricing

Azure Files costs depend on access tiers (Premium SSD, Standard HDD) and billing models:

Provisioned Pricing (SSD/HDD)

• Premium SSD: $0.181 per GiB/month (v1)
• Standard HDD: $0.0088 per provisioned GiB/month (v2)

Pay-as-You-Go (Standard HDD)

• Transaction Optimized: $0.060 per used GiB/month
• Hot Tier: $0.0276 per used GiB/month
• Cool Tier: $0.015 per used GiB/month

Transaction Fees

• Write Transactions (10K): $0.015 (Transaction Optimized), $0.065 (Hot), $0.13 (Cool)
• Read Transactions (10K): $0.0015 (Transaction Optimized), $0.0052 (Hot), $0.013 (Cool)

Reservations

Committing to 1- or 3-year terms provides discounts, especially for large deployments.

Organizations can reduce costs by optimizing tier selection, using bulk write operations, and avoiding excessive snapshots.

Azure Table Pricing

Azure Table Storage, designed for NoSQL workloads, charges based on data storage and operations:

Data Storage Costs:

• LRS: $0.045 per GB/month
• GRS: $0.06 per GB/month
• RA-GRS: $0.075 per GB/month

Operations (10K Transactions):

• Batch Write: $0.0922 (LRS), $0.184 (GRS)
• Read/Write Operations: $0.0062 (Reads), $0.0308 (Writes for LRS)

Cost-Saving Considerations:
Optimize batch processing to reduce the number of individual operations. Batch writes offer significant cost savings compared to individual transactions.

Azure Queues Pricing

Azure Queue Storage pricing includes storage and operations charges.

Storage Costs:

• LRS: $0.045 per GB/month
• GRS: $0.06 per GB/month
• RA-GRS: $0.075 per GB/month

Operations (10K)

• Class 1 (e.g., PutMessage, UpdateMessage): $0.0004
• Class 2 (e.g., PeekMessage): $0.0004

Cost Optimization
Consolidating messages into fewer, larger batches and reducing message retention times can help minimize costs.

Azure Managed Disks Pricing

Managed Disks pricing depends on the type of disk selected:

1. Premium SSD: P10 (128 GiB): $19.71/month (LRS), P30 (1 TiB): $135.17/month
2. Standard SSD: E10 (128 GiB): $9.60/month
3. Standard HDD: S10 (128 GiB): $5.89/month
4. Ultra Disk: $0.14746/GiB/month, plus additional fees for IOPS and throughput based on configuration.

By leveraging Reserved Capacity and appropriate disk selection, organizations can save costs, especially for predictable, long-term workloads.

5 Best Practices to Optimize Azure Storage Costs 

Implementing these best practices allows organizations to reduce their storage costs in Azure.

1. Implement Storage Lifecycle Management Policies

Azure Storage lifecycle management provides automation for transitioning data between storage tiers and managing blob deletions, reducing both storage and administrative costs. Define policies that automatically apply tier transitions or deletions based on conditions such as file age or access frequency. For example:

• Move blobs from Hot to Cool after 30 days of inactivity.
• Transition to Archive after an additional 90 days.
• Delete blobs after 365 days if no longer needed.

This reduces manual oversight and ensures data is stored in the most cost-effective tier over its lifecycle. It also helps eliminate unnecessary storage costs by removing obsolete data.

Set up lifecycle policies through the Azure portal or programmatically using Azure Resource Manager templates. Continuously review policies to align with evolving data retention requirements.

2. Use Reserved Capacity Pricing

Reserved capacity pricing allows organizations to save on Azure Storage costs by committing to a specified amount of storage for one or three years.

• Savings: Discounts can range up to 38% compared to pay-as-you-go pricing. This option applies to storage types like Blob Storage and Azure Files.
• Implementation: Choose a reservation that aligns with average storage needs. For example, if the organization consistently uses 100 TB of blob storage, reserving this capacity for three years can lead to significant cost reductions.
• Flexibility: Azure also allows admins to adjust reservations if requirements change, such as applying unused capacity to other subscriptions within the account.

Assess historical storage usage trends to identify the minimum required capacity. Use Azure Cost Management tools to simulate savings before purchasing a reservation and regularly revisit capacity commitments as workloads evolve.

3. Monitor and Manage Storage Utilization

Efficient storage management helps minimize costs by identifying unused resources and optimizing storage configurations.

• Use monitoring tools: Use Azure-native tools like Azure Monitor, Cost Management, and Storage Analytics to gain visibility into storage utilization. These tools can help track unused or idle data that can be archived or deleted. They can also identify redundant copies of data that can be consolidated and excessive operation charges due to frequent read/write operations.
• Delete unused resources: Identify orphaned files or temporary blobs and remove them to free up space.
• Optimize file formats: Compress or deduplicate data to reduce storage footprint.
• Configure access policies: Restrict unauthorized operations that might lead to unnecessary costs, like unplanned data transfers.

Set up alerts for unusual cost spikes or increased operation activity using Azure Cost Alerts. Regularly conduct storage audits to ensure efficient use of resources and avoid overpaying.

4. Secure Data with Efficient Encryption Options

Azure Storage offers built-in encryption options to protect data at rest and in transit. Properly managing encryption can also reduce operational overhead and associated costs.

Encryption options:

• Server-side encryption with managed keys (SSE): Azure automatically manages encryption keys, reducing the burden of key management and associated hardware or software costs.
• Customer-managed keys (CMK): Enables organizations to use their own encryption keys, stored in Azure Key Vault, for compliance or advanced security needs.
• Bring Your Own Key (BYOK): Offers full control over encryption keys for sensitive workloads, but requires external key management systems, which may increase costs.

Cost optimization:

• Use SSE for default scenarios to minimize key management costs.
• Opt for CMK only if strict regulatory compliance or business requirements require it.
• Evaluate encryption strategies to balance security needs and cost-efficiency.

Use Azure’s security best practices guide to ensure compliance and cost-effectiveness. Implement policies to monitor encryption settings and key usage, avoiding unnecessary expenditures while maintaining data protection.

5. Optimize Backup Costs 

Effective backup strategies can help reduce Azure Storage costs without compromising data protection or recovery requirements. Here are key considerations for optimizing backup costs:

• Right-size backup storage: Avoid overprovisioning backup storage by aligning the allocated storage space with actual backup needs. Use Azure Monitor and Azure Backup reports to track backup usage trends and identify excess or unused capacity. 
• Use incremental backups: Use incremental backups instead of full backups wherever possible. Incremental backups only store changes made since the last backup, significantly reducing the volume of stored data and associated storage costs. 
• Configure retention policies: Optimize retention policies to keep backup copies only as long as necessary. For example, consider retaining daily backups for 30 days and monthly backups for a year, based on business needs.
• Utilize archive storage for long-term retention: Move long-term backup data to the Archive tier to benefit from the lowest storage costs. This is useful for backups needed for regulatory or compliance purposes but accessed infrequently. Set up Azure Backup policies to automatically transition older backups to the Archive tier.
• Deduplicate and compress backup data: Enable deduplication and compression to reduce storage space requirements. Azure Backup automatically supports these optimizations for certain workloads, such as database and file backups.
• Monitor backup operations: Review the frequency of backups and adjust schedules to balance recovery point objectives (RPOs) and cost-efficiency. Configure alerts to detect unusually large or frequent backups that may signal misconfigurations.

Related content: Read our guide to Azure backup pricing

Use N2W for No-Cost, Full-Featured Azure Backup

While Azure Backup offers robust data protection features, organizations looking for enhanced flexibility, additional security options, and better cost control may find significant advantages in using N2W Backup & Recovery for Azure. Here’s why N2W could be the better fit for your backup needs:

No-cost Azure Backups

Unlike Azure Backup, which has a fixed service cost and charges per number of protected instances, N2W does not have fixed service costs. You can manage backups for free and only pay for Azure storage and bandwidth costs.

Cross-Cloud from AWS to Azure

N2W enables cross-cloud backup and recovery between AWS and Azure. This feature allows you to create a highly secure backup in—not just a separate account or region, but a separate cloud—for the ultimate data protection.

Immutability

Users can make backups immutable, adding a layer of security by preventing data changes during the retention period. This may help meet various compliance requirements.

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, leveraging 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, leveraging archive storage, and considering third-party solutions like N2W, businesses can significantly cut costs while maintaining robust data protection. Ready to take your backup strategy to the next level?

Learn more about N2W for Azure Backup