3.2.2. 💡 First Principle: Estimating Cost Before You Spend

First Principle: Cost estimation tools exist to move a spending decision before the money is committed. The question they answer differs by where you are starting from: designing something new, or moving something you already run.

What It Is: Two different jobs, two different tools.

• Azure Pricing Calculator:
  • Description: A free web tool for pricing new Azure deployments. It knows nothing about your environment — you assemble the services yourself.
  • Use Case: Select and configure services (VMs, storage, databases, bandwidth), adjust region and term, and get an estimated monthly or annual price. This is how you budget a project that does not exist yet, and you can save and share the estimate.
• Azure Migrate — the business case:
  • Description: Azure Migrate discovers your existing on-premises estate and builds a business case from what it finds: the total cost of ownership of running those servers where they are, against the projected cost of running them in Azure.
  • Use Case: The on-premises side models server and storage hardware, Windows Server and SQL Server licensing, network equipment, datacenter facilities and power, and IT administration labor. The Azure side models the equivalent services, including Azure Hybrid Benefit savings. The output is a year-over-year cash flow and savings comparison — the report a CFO signs a migration off against.

A note on the TCO Calculator: older AZ-900 material points at a standalone Total Cost of Ownership (TCO) Calculator at azure.microsoft.com/pricing/tco/calculator. Microsoft retired that tool in 2025 and its URL now redirects; the on-premises-versus-Azure comparison it used to produce is the Azure Migrate business case described above. If you meet the TCO Calculator in a practice question elsewhere, the exam objectives no longer list it.

Scenario: A company is considering migrating its on-premises data center to Azure. The CFO needs a detailed report that compares their current IT spending with the projected costs of running their infrastructure in the cloud to justify the migration.

Reflection Question: The Pricing Calculator can price every Azure service the company would end up running. Why is that still not the report the CFO asked for?

💡 Tip: Pricing Calculator = price a new design you configure by hand. Azure Migrate business case = compare an existing estate against its Azure equivalent. The giveaway is whether the workload already exists somewhere.