GCP vs Azure: Cost Comparison

Last Updated on May 30, 2025 by Arnav Sharma

Cloud computing has redefined how businesses manage their IT infrastructure, offering flexibility, scalability, and the ability to operate with a leaner capital expenditure (CapEx) model. For mid-tier organizations, the decision often boils down to Google Cloud Platform (GCP) and Microsoft Azure. Both platforms promise robust capabilities, but understanding their cost structures and optimization opportunities is crucial for selecting the right fit.

PS – All costs are in USD.

Understanding the Shift from CapEx to OpEx

Traditionally, businesses would invest heavily in physical servers, networking gear, and storage devices, a model known as Capital Expenditure (CapEx). Cloud computing shifts this paradigm to Operational Expenditure (OpEx), where costs are incurred as services are consumed. This pay-as-you-go model is central to cloud adoption, enabling businesses to avoid large upfront investments and only pay for what they use.

Example:

Imagine a mid-sized retail company that previously spent $500,000 upfront to deploy servers and storage for its operations. With cloud computing, that company can now opt for a monthly OpEx model, paying only for what it consumes. If its typical monthly usage is around $10,000 on Azure or GCP, it not only spreads the cost but also gains the ability to scale up during peak seasons like Black Friday without the need to purchase more hardware.

Profiling a Mid-Tier Organization

A mid-tier organization, as defined by industry standards, typically has between 100 and 1,000 employees and an annual revenue of $50 million to $1 billion. These companies are large enough to require robust IT infrastructure but often lack the vast IT teams and budgets of enterprise-level companies. The typical IT budget for these organizations ranges from $5 million to $25 million annually, demanding cost-effective and scalable cloud solutions.

Example:

A regional financial services company with 500 employees may have an annual IT budget of $8 million. Moving its CRM, database management, and analytics platforms to the cloud allows it to operate within this budget while accessing enterprise-grade tools that were previously cost-prohibitive.

Key Cloud Service Needs for Mid-Tier Businesses

Mid-tier organizations leverage cloud platforms primarily for:

• Infrastructure as a Service (IaaS): Virtual machines, networking, and storage solutions.
• Platform as a Service (PaaS): Development and deployment environments for applications.
• Software as a Service (SaaS): Access to business applications like CRM and ERP solutions.

Example:

A software development company using Azure’s PaaS capabilities can deploy test environments for client applications in minutes, avoiding the need for physical servers and complex networking.

1️⃣ Compute (Virtual Machines)

Compute costs are often the largest portion of cloud expenditure. Both GCP and Azure provide various machine families optimized for different workloads.

Example:

If you run a VM for 24 hours a day, 30 days a month:

• GCP (e2-standard-4): $0.134 × 24 × 30 = $96.48
• Azure (D4s_v3): $0.096 × 24 × 30 = $69.12

However, GCP’s Custom Machine Types allow you to specify exactly how much RAM and vCPU you need, potentially cutting costs by avoiding over-provisioning. For example, you can create a VM with 3.5 vCPUs and 7.5GB RAMinstead of paying for a full 4 vCPUs if your application only needs slightly less.

2️⃣ Storage (Object & Block)

Storage costs vary significantly based on the tier and usage. Both platforms offer multi-tiered storage:

Example:

If you store 10TB of archived financial records:

• GCP (Nearline): $0.015 × 10240 = $153.60
• Azure (Cool LRS): $0.010 × 10240 = $102.40

Azure’s Cool LRS proves to be more economical for archival data, but GCP’s Coldline can sometimes be even cheaper if retrieval frequency is low.

3️⃣ Networking Costs

Network egress (outbound data transfer) is another key cost consideration:

Example:

If your application transfers 2TB of data per month:

• GCP (Standard Tier): $0.085 × (2048 – 200) = $157.08
• Azure (ISP Routing): $0.080 × (2048 – 100) = $155.84

Azure’s ISP routing is slightly more economical for large data transfers.

7️⃣ Cost Management Tools

• GCP: Active Assist, Budget Alerts, Recommendations.
• Azure: Azure Cost Management, Advisor Recommendations, Cost Alerts.

These tools allow real-time monitoring, budget alerts, and optimization suggestions, ensuring that cloud expenditure remains within forecasted limits.

🔎 Conclusion and Strategic Recommendations

Both GCP and Azure offer competitive pricing models that can be optimized with proper cost management. For mid-tier organizations:

• Choose GCP if custom VM configurations and granular cost controls are crucial.
• Opt for Azure if you require tight Microsoft integration and efficient data transfer pricing.
• Utilize cost management tools effectively to avoid overages.

Both platforms shine under different scenarios, and the right choice depends largely on your organization’s specific needs and existing tech stack.