Azure Kubernetes Engine (AKS) Pricing & Cost Optimization

Kubernetes is a product that helps manage and scale containerized applications. Kubernetes can be bootstrapped using Azure Kubernetes Service, AKS, to save time and effort when scaling applications and workloads.

Kubernetes is a high-velocity open-source solution for managing containerized workloads and services. It makes it easy to orchestrate many containers on many hosts, scale them as microservices, and easily deploy rollouts and rollbacks.

At the highest level, Kubernetes is a set of APIs that you can use to deploy containers on a set of nodes called a cluster.

However, managing Kubernetes on an infrastructure that you administer can be exhaustive and resource-intensive. By using Azure Kubernetes Services (AKS), you can spin your clusters and accelerate your path to cloud-native application development and move rapidly through implementation.

Kubernetes abstracts away the actual physical infrastructure by providing a production-ready cluster consisting of controller nodes and worker nodes to which containers can be deployed. And AKS helps ensure your containerized applications run on-demand, and with the resources and tools needed for them to run. 

In this article, we will cover the AKS pricing model and accounting structure to help guide your forecasting strategies.

Understanding AKS Pricing Model

Azure Kubernetes Service is designed to handle the routine operational tasks required to maintain a Kubernetes cluster. You can run highly available Kubernetes clusters in multiple regions, integrate with other Azure services, and use the enterprise security features provided by Microsoft Azure. And you pay for what you use.

The AKS pricing model and accounting structure are simple. Here's a visual of the AKS pricing table, comparing tiers in features, support, and cost.

Free Tier

The free tier options are for new customers, and all Cloud providers offer some services for free up to certain preset limits. They provide credits that either expire upon usage or within a specified time frame. Azure offers 12 months of popular free services along with a $200 credit.

Azure also provides over 25 services that are always free, including but not limited to Azure Storage, Azure Container Registry, and Azure Arc.

Pay As You Go

Pay-as-you-go, also known as on-demand, is the most common type of purchasing model. This is the default purchasing model for Azure Kubernetes Service. Pay as you go is like how utilities are paid. You pay only for the services that you use.

There are no upfront costs, or commitments required. And it is particularly useful if you have variable or unpredictable workloads, as you only pay for the resources you use.

This option is practically suitable for budget-conscious customers or those uncertain about future resource needs. Additionally, you receive a 99.95% SLA for the Kubernetes API server with Azure Availability Zones or 99.9% for clusters without them.

AKS Compute Savings Plan

With Savings Plans, you agree to pay a set amount of money per hour for one or three years. This commitment can save organizations up to 65% compared to the regular pay-as-you-go prices for computing services.

Savings Plans work well for tasks that change a lot or have unexpected shifts. One big benefit is that they offer flexibility — you can use your commitment across different services. For example, the money you commit to spending can be used for services like AKS, virtual machines, Azure SQL Database, Azure Cosmos DB, and more. This way, you have control and flexibility over how you use your budget for computing needs.

Azure Reserved Pricing

In Azure, when you buy AKS Reservations, you have a few options. You can choose a one-year or three-year plan, and the longer the plan, the bigger the discount you get. You can pay all at once (upfront) or in smaller monthly payments. If you pay monthly, there are no extra fees.

With Azure Reservations, you can save up to 70% compared to the regular pay-as-you-go prices for Azure Kubernetes Service (AKS). Most reservations apply hourly, except for Azure Databricks, which is a bit different.

If you change your mind or need something else, you can exchange your reservation for another one of the same type in different regions. You can also change the operating system or the type of instance you reserved. If necessary, you can cancel or get a refund for your reservation, but the total refund can't be more than $50,000 in a 12-month period.

Keep in mind, Azure Reservations don't guarantee a specific amount of capacity, but they give you priority access to it. For even more savings, you can also use the Azure Hybrid Benefit program (AKS) for Windows and SQL in addition to your reservations.

Azure Spot Instances

To use spot instances in Azure, you bid on an unused compute space. The cost is based on an hourly rate called the spot price and it also depends also on how many people want the same type of space you're bidding for. The good part about spot instances is they offer the biggest discount, up to 90% off the regular price.

There's also another type called low priority VMs, which are even cheaper but may get interrupted. They are also ideal for workloads that can be interrupted, providing scalability while reducing costs.

There are downsides. The main issue is that your work might get interrupted at any time. There's no guarantee, no promise that your job won't be stopped, and there's a time limit on how long your spot instance can run if others are willing to pay more.

Why Optimize AKS Cost

There is a strong incentive for cloud providers to make happy noise about how they provide good cost controls. However, there is a very strong incentive not to make those tools powerful and useful. This is because, if they were as effective and efficient as they claim to be, they would enable users to pay the cloud provider less. 

Another factor is overprovisioning, which is the top reason why companies constantly see their AKS bills growing. And choosing the best practices for running cost-optimized workloads is not easy, it requires FinOps expertise and deep technical experience.

You need a more holistic solution, considering the AKS cost curves due to overprovisioning or poor management. Amnic offers advanced Kubernetes visibility for granular data, maximum observability, tag management, multi-cloud monitoring, etc.

Amnic delivers a cloud cost observability platform that helps measure and rightsize cloud costs continuously. It is agentless, secure and allows users to get started in five minutes at no cost. Amnic provides a suite of features such as cost explorer, K8s visibility, custom dashboards, benchmarking, anomaly detection, alerts, K8s optimization and more. 

Amnic provides precise recommendations across network, storage and compute, based on your cloud infrastructure to identify high costs and industry best practices to reduce them. 

With Amnic, organizations can successfully build a roadmap towards lean cloud infrastructure and build a culture of cost optimization among their teams. Visit www.amnic.com to learn more about how you can get started on your cloud cost optimization journey.