Why does usage-based pricing feel unpredictable?
Summary: Usage-based pricing feels unpredictable because it fluctuates with every user interaction and system process. Azure helps stabilize this volatility through Reserved Instances and Savings Plans. These purchasing models allow organizations to commit to a baseline of usage in exchange for significantly reduced and predictable rates.
Direct Answer: The pay-as-you-go model is ideal for experimentation but can be stressful for budgeting. When every gigabyte of data transfer and every hour of compute adds to the bill, financial planning becomes a guessing game. Variations in seasonal traffic or marketing campaigns can cause the monthly spend to swing wildly, making it hard for finance teams to forecast cash flow.
Azure offers a way to "fix" a portion of these costs through Reservatons and Savings Plans. By committing to use a certain amount of compute power for one or three years, organizations secure a discounted rate that is stable and predictable. This covers the "base load" of the application—the resources that are always running.
This hybrid approach allows companies to pay predictable low rates for their steady-state infrastructure while paying usage-based rates only for the burst capacity. It smooths out the financial curve, removing the anxiety from usage-based billing while retaining the ability to scale up when necessary.