hello guys my name is Adam welcome back

to our fourth episode of arrow

fundamentals course

in this episode I'll take you through

what is consumption based pricing model

in the cloud stay tuned

one of the most important things you

need to understand when you start

working with Azure is how other is

pricing services and to do that you need

to understand consumption based model

and to help you understand that I will

use exactly same example as in previous

episodes naturally a typical usage

fluctuates over time and to match that

user to demand you want to allocate as

many resources as you need at any given

time ideally you will only pay for those

resources during the time of the usage

and only as much as the resources that

you consumed the first thing you should

note is that there is no upfront cost

because with consumption based model you

only start paying when you start using

the resources and because cloud is

elastic you don't have to assign

resources when you don't need them that

of course means there are no wasted

resources and you're not paying for them

so simply said if consumption based

model you only pay for the resources

when you need them and you stop paying

as soon as you don't need them but in

order for this model to work we need to

understand one more thing so let me use

a service like a virtual machine as an

example here charging for a service like

virtual machine might be very tricky so

what Microsoft did is created a few

metrics that the price is based on first

one is so-called compute - this is the

power of the virtual machine the size of

the virtual machine that we purchased if

your usage changes per day if your size

changes per day you will be charged

different amount each day additionally

you will filter machine usually there's

a storage attached you are priced for

that storage separately so that if you

have small machine but a lot of storage

you will pay different price that if you

have big machine and very low amount of

storage or of course some additional

metrics that are factored in in the

price of virtual machines like

networking not really the amount of

those factors is different per service

because there are different services and

they have different complexity because

some services are easier to price other

are harder but they are designed so that

Microsoft can charge you appropriately

to your use it therefore in a

consumption based model you have

multiple pricing components per each

service additionally the charges are

very

very granular if you only use virtual

machine for 20 seconds you will only pay

for 20 seconds of the usage as an

example here I want to quickly go to

other portal which is a powerful

web-based self-service portal allowing

its users manage all of the aspects of

their other resources inside the Vajra

portal there is a one service that

interests us right now is the cost

management service inside of that

service I can reveal the cost of my

subscription I think it's the best

example to show you a real case of

consumption based model in Azure using

my own subscription and to do that I

will select my own subscription from the

list now on the left hand side panel I

will select cost analysis and this will

open a new window which will allow me to

analyze the cost of my own auto

subscription or the previous months and

previous days

as an example I will use a last month

data to show you the costs let me scroll

down here select last month I will

change the granularity daily

and change the area chart the column

chart by default you will only see the

total cost per day which is very hard to

use if you want to understand where are

the costs coming from so my advice is

always change the group by and select

from the list the service name this way

you can review the cost of your other

services divided by day and by the

service name

in this case on the screen you can see a

lot of colors each color indicates a

separate service that are used in this

case as you can see my virtual machine

costs are very flat the reason for that

is because I'm using the same virtual

machine running constantly 24 by 7 every

day there are some additional costs

related to store it because that virtual

machine has a storage attached again a

flat fee because that storage is

consuming the same amount of storage

every single day through one day on the

June 19th you can see the increase in

the cost and this is because I was using

Azure data break service which created

some extra virtual machines therefore my

storage and virtual machine cost rolls

that day if we look back a little bit

we'll be able to see on the previous day

some additional costs like logic ops

because during the day I was performing

some tests 2 days back I was using Azure

data factory the same goes for last week

and he go even further

IOT hubs were used so what you can

observe here is that on the days that I

was using my services less I simply was

charred a smaller amount on the days I

did used and more I paid more it's as

simple as that whenever I'm using my

services I'm paying based on my

consumption and if I use my data factory

lesson someday I simply paid less

and that's pretty much it

consumption-based model simply means

paying for what you're using or this

episode please go to my website -

episode number four and in the study

guide you will only find cheat sheet and

the practice test because this was

fairly simple episode try yourself try

what you learned and let me know your

feedback and that's it for this episode

I appreciate every single one of you

that stayed until the very end if you

like what I do support the channel by

subscribing liking and commenting if you

want to follow to the next episode

simply use the playlist or hit icon on

the side and see you in the next episode

[Music]