Describe the consumption-based model
📘Microsoft Certified: Azure Fundamentals (AZ-900)
What is scalability?
Scalability refers to the cloud’s ability to increase or decrease resources (like compute, storage, network capacity) to meet the workload needs of an application.
Scalability ensures that your application can handle more users, higher traffic, or larger data processing tasks without failing.
Two types of scalability in Azure
1. Vertical Scaling (Scale Up/Scale Down)
- You increase or decrease the capacity of an existing resource.
- For example, upgrading a virtual machine (VM) from a 2-CPU setup to an 8-CPU setup.
2. Horizontal Scaling (Scale Out/Scale In)
- You add or remove multiple instances of a resource.
- For example, increasing from 2 VM instances to 10 VM instances during high usage.
Why scalability matters
- Maintains performance even when demand grows.
- Supports business growth without redesigning the entire system.
- Helps avoid service failures caused by resource shortages.
In the AZ-900 exam, remember:
- Scalability = adjusting capacity to meet workload demands.
- Horizontal = more instances.
- Vertical = bigger instances.
2. Elasticity
What is elasticity?
Elasticity refers to the cloud’s ability to automatically add or remove resources in real time based on the workload.
If the workload increases, Azure automatically scales the system up.
If the workload drops, Azure automatically scales down.
Elasticity = automatic scaling
Scalability = ability to scale (manual or automatic)
Example in an IT environment
- A web application gets heavy traffic at certain times of the day.
- Azure automatically creates more VM instances to handle the load.
- When traffic decreases, Azure automatically removes the extra VM instances.
- You pay only for the extra resources used during the high-traffic period.
Why elasticity matters
- Prevents overspending on unused resources.
- Improves application performance automatically.
- Ensures high availability and responsiveness.
In the AZ-900 exam, remember:
- Elasticity = automatic adjustment of resources based on demand.
- It happens without manual intervention.
3. Cost Efficiency
What is cost efficiency in the consumption-based model?
Cost efficiency means paying only for what you use and optimizing resources so you are not spending money on unnecessary capacity.
Azure helps organizations:
- Avoid spending on physical hardware.
- Reduce waste by removing unused resources.
- Use built-in tools to optimize cloud budgets.
How the cloud enables cost efficiency
1. No upfront hardware costs
In traditional on-premises environments:
- You must purchase servers in advance.
- You may overbuy resources to prepare for future growth.
In Azure:
- You deploy resources when you need them.
- You avoid the cost of maintaining physical infrastructure.
2. Pay-as-you-go billing
You pay only for:
- VM hours used
- Storage consumed
- Data transferred
- Services running
This prevents paying for idle resources.
3. Automatic scaling reduces waste
Elasticity ensures:
- When demand increases → scale out (pay more temporarily)
- When demand decreases → scale in (stop paying for unused resources)
This is a powerful cost-saving mechanism.
4. Azure Cost Management tools
Azure provides tools to track, analyze, and control spending:
- Azure Cost Management and Billing
- Budgets and alerts
- Recommendations for savings
These tools help organizations stay within budget.
5. Use of different pricing models
Azure offers multiple cost-saving options:
- Pay-as-you-go (no commitment)
- Reserved Instances (1- or 3-year commitment)
- Spot pricing (unused Azure capacity at lower cost)
- Auto-shutdown for development VMs
In the AZ-900 exam, remember:
- Cost efficiency = paying only for resources you use.
- Scaling and elasticity directly support cost savings.
- Consumption-based billing helps avoid overspending.
How scalability, elasticity, and cost efficiency work together
These three concepts are closely related:
| Concept | Meaning | Azure Behavior | Benefit |
|---|---|---|---|
| Scalability | Ability to grow or reduce resources | Manual or automatic scaling | Handles larger workloads |
| Elasticity | Automatic scaling based on demand | Real-time scale out/in | Prevents performance issues and saves cost |
| Cost Efficiency | Pay only for what you use | Consumption-based billing | Eliminates waste and reduces expenses |
Together, they ensure that:
- Applications stay responsive.
- You never pay for more resources than necessary.
- Resources match workload demand at all times.
