Introducing Our New MSP Partner Program and Benefits

It’s an exciting time to be a Managed Service Provider (MSP) and specifically for those who have transformed their business and created a cloud MSP. Microsoft continues to grow their Azure business almost 50% year over year at a seemingly endless pace.  

MSPs who have built their operations to take advantage of all the cloud offers from a SaaS and IaaS perspective are reaping the benefits in the form of greater margins, more attractive pricing and packaging for their customers, and distinguishing themselves from their competitors who are still living in the on-premises world. 

MSPs who have not yet explored a move to the cloud but who support Microsoft technologies and services have likely started to question their stance given the changes to Microsoft’s partner programs and requirements. We are energized by the early adopters and drivers of Azure in our partner community and the ways we’ve seen them use services like Azure Virtual Desktop and Windows 365 to catapult their businesses. 

And yet we are incredibly excited here at Nerdio to see these changes lay a powerful foundation for taking the MSP industry to the next level and reinforcing that service providers need to be taking a cloud-first approach wherever possible to remain competitive and best serve their clients’ needs.  

To support the next generation of MSPs growing alongside Microsoft, Azure and Azure-based services – we are incredibly excited to introduce our revamped partner program, Partnerd.  

Program History + New Partnerd Benefits 

A year ago, we launched our company’s first partner program aimed at arming MSPs with the tools, resources and support necessary to build a cloud-MSP based on Microsoft Azure. Much of our initial investment in Partnerd was geared towards education and enablement; ensuring our partners would be able to quickly bring more of their customers into the modern cloud world using Nerdio as the foundation of their efforts.  

The first year of Partnerd coincided with the launch of NerdioCon—our first in-person user conference which took place in Cancun, Mexico and offered attendees the only MSP conference fully dedicated to Microsoft cloud technology. At the conference, more than 35 sessions and keynotes gave nearly 200 participants from around the world the hands-on knowledge they needed to accelerate their cloud journeys. 

I say this all to reinforce and illustrate that educating MSPs about the Microsoft cloud is a core company value for us. For MSPs who don’t choose to join Partnerd, we will continue to provide free, best-in-class support via our world-class documentation and vast community of users. Furthermore, you will also receive up to 10 Internal User Licenses of Nerdio Manager and Go-Live Engineering support for your first Nerdio deployment.  

The revamped Partnerd program includes important updates and the addition of significant incremental value for all Nerdio partners. The program will continue to maintain four tiers: Bronze, Silver, Gold, and Platinum. To receive these exclusive Partnerd benefits, MSPs will be required to sign up for a specific Partnerd tier and commit to that level or greater for six months. 

New Partnerd benefits include: 

  • Discounted Nerdio Manager licenses at each new level from 25%-75% off MSRP 
  • Dedicated Partner Success Manager to help accelerate your move to the cloud, coordinate routine Azure Business Reviews, and more!  
  • Discounted NerdioCon participation for Bronze and Silver Partnerds, taking place February 27-March 2 in Cancun, Mexico 
  • Platinum and Gold Partnerds receive all-expenses paid travel and hotel for NerdioCon  
  • Support for your own MSP-led events in the form of an Event-in-a-Box or Marketing Development Funds (MDF)  
  • Travel vouchers across all tiers to attend Nerdio first party events including Nerdio Training Camp, the Economics of Azure Training Camp, and Nerdio CEO Summit 
  • Up to 20 free Go-Live Engineers to support Nerdio deployments 
  • Up to 100 Internal Use Licenses 
  • Free Nerdio Manager certifications 
  • Exclusive webinars with Microsoft leadership members 

There has never been a more exciting time to be a Nerdio partner and an MSP investing in the cloud. We are excited to continue evolving our Partnerd program and bringing you the tools and resources you need to build a profitable cloud MSP. You can sign up for the Partnerd program and view each tier benefits and requirements at   

The Case for Change – Remote Work’s Impact on Healthcare in the UK

Guest Blogger  

Craig Pickford, Solutions Architect, Block

The events of 2020 changed the world as we knew it. Overnight organisations had to drastically adapt as new ways of working were adopted at a breakneck pace, and for most, that pace of digital change has remained as we enter the second half of 2022.

At the forefront of the pandemic, Primary Care organisations across the UK were faced with the dilemma of keeping staff isolated and remote, whilst continuing to provide effective and safe care for the patient populations they serve.

Back then the concept of remote working for general practitioners (GPs) wasn’t entirely new, but it wasn’t exactly commonplace either. Many of the existing solutions, whilst good enough for emergency or occasional use, were just not up to the task of providing effective ways to consult and diagnose from a distance all day long.

NHS organisations that had deployed virtual desktop solutions prior to the pandemic were best placed to act quickly, with staff able to work from home and use their own devices to securely access clinical systems and data. But the continued success of these solutions also brought fresh problems; capacity was soon bursting at the seams, and due to the worldwide chip shortage, long lead times for much needed hardware meant that organisations couldn’t bolster capacity quickly enough to meet demand.

With challenges at every turn, a change in approach was needed, and it was needed fast – step forward Block’s Primary Care Workspace.

Delivering a Better Primary Care Workspace

Built on Azure Virtual Desktop and powered by Nerdio, the service has true elastic scale and already provides over 6,000 GPs and surgery staff across the UK with fast, simple, and secure access to core clinical systems. Designed initially as a pure remote access solution, it continues to drive Primary Care innovation, enabling patient services to be delivered in new ways leading to better clinical outcomes.

Based on personal preferences, patients can now choose to speak with a GP in-person, or over a video call, with the latter often resulting in quicker appointment times, faster diagnoses, and more timely treatment. GPs and support workers are benefiting from improvements in work/life balance as homeworking is now seen in many cases as a win/win for both staff and business owners. Today, due to parts of the workforce operating remotely, the number of appointments per day is no longer restricted by the physical space within a practice meaning more patients can be seen each day – the theoretical capacity of each practice is endless.

The functionality provided by the service has never been more valuable than in remote areas of the UK, where finding and retaining trained medical staff has been problematic for years. Now, with the Primary Care Workspace these practices can deliver improved patient services and choice by rethinking their recruitment strategies, unrelated to where staff live.

Supporting UK GPs

This change in approach was needed, At the height of the pandemic in 2021 almost 30% of all GPs in England felt so overstretched by the demands put on them that it was affecting their wellbeing, and therefore they were considering early retirement. By offering the ability to work remotely using effective technology solutions, we’re not only seeing many GPs continuing to work, but many more have come out of retirement part-time, working remotely to assist with the growing health and social care challenges we face as a nation.

And there is additional value being realised at an operational level too. Developed by Block, a self-service portal is enabling Practice Managers and administrative staff to onboard new users, assign access to applications and scale out additional desktop capacity themselves in a few clicks. What could previously take several days, can now be done in just seconds. As staffing levels across different regions have diversified, the ability for practice staff to onboard locums and agency staff in this way is reducing delays in accessing systems, vital to providing safe and effective care and managing surges in appointments.

The Nerdio Advantage

With far fewer technical issues and faster resolution times the desktop experience has never been greater. IT teams are gaining more time back into their day, freeing up valuable time to drive further positive change. The automation features provided by Nerdio, from their cloud-based Azure management platform Nerdio Manager for Enterprise, are streamlining once-mundane tasks including Windows patching and clinical system updates. They’ve centralised the deployment of VDI via Azure meaning that it’s far easier to deliver and guarantee successful change for every user. Automating security and patching is giving IT, and management, the assurance that they remain compliant with NHS standards such as the Data Security and Protection Toolkit (DSPT). And advanced monitoring capabilities give valuable insight into system performance, allowing the service to adjust dynamically to provide sufficient resources when needed, and to reduce them again when they aren’t.

And the list of benefits doesn’t end there. By leveraging Nerdio’s auto-healing capabilities, Block has built a catalogue of digital workers that continuously check the environment, instantly putting back into place anything that falls out of line. This fortifies our promise and allows us to provide a user experience that is far greater than can be achieved from a traditional PC, or any other solution.

Not Just Better but Greener Too

As our service supports any device, we’re also seeing customers rethink their device strategies, with some promoting BYOD, and others repurposing older devices. This approach not only reduces the overall costs of running their GP practices but is helping to extend the total life of their PC and laptop estates and minimising the environmental impact of ordering new equipment every few years.

Block’s Primary Care Workspace is an all-encompassing cloud-based virtual desktop service designed alongside some of the largest Primary Care organisations in the UK. This new, better way of delivering clinical systems and services to GPs, wherever they are, is helping to transform Primary Care in the UK, supporting new models of care, and driving better patient outcomes.

About the Author

Craig Pickford

Solutions Architect at Block

Craig is responsible for the development of Block’s Workspace propositions and services, liaising with clients, vendors and peers to ensure solutions meet requirements and deliver intended outcomes. Craig has been helping NHS organisations adopt and realise the benefits of virtual desktop solutions and other Workspace technologies since 2012. He has a diverse range of technical knowledge and skills, specialising in VDI for Healthcare, Identity Management solutions, Mobile Device Management, and public cloud (Azure and AWS). Craig also has a wide set of technical certifications within VMware, Cisco, Microsoft and AWS domains. You can find (and connect with!) him on LinkedIn.

When to Use Session-based vs Personal Desktops 

When utilizing Azure Virtual Desktop (AVD), there are several strategies that IT teams can implement to keep computing costs down while improving the management experience. One of the most popular tactics is to leverage session-based virtual desktops to maximize resources. 

However, IT teams must understand the differences between session-based and personal desktops and the optimal circumstances for both when architecting their host pools and virtual machine (VM) resources.  

Differences between Personal and Session-based Desktops 

When trying to determine which type of desktop best fits your users’ needs at scale, it’s important to start by ensuring you know the difference between the two.  

  • Personal Virtual Desktop – Where a single VM is used for a single user to run their desktop. This is almost identical to traditional endpoint computing in which every user had their own physical device with its own operating system (OS), memory, etc. In terms of what types of VMs are best for this type of desktop, we typically see personal desktops using the D series (standard CPU to Memory ratio) with D2 being most common for average workers and D4 for heavier, non-GPU, users.  
  • Session-based Virtual Desktop – Where multiple users share the resources of single VM. Each user has their own personalized virtual desktop experience with their own unique profile including favorites, shortcuts, apps, etc. But they share the same OS, CPU & RAM of a single VM. 

How Azure Virtual Desktop Fits In  

Azure Virtual Desktop, introduced to the market in 2019 as Windows Virtual Desktop, brought with it big changes to multi-session computing because it allowed for truly native Windows 10/11 desktops that could be personal or session-based. In the past, the only way possible for session-based desktops was to use a server OS (Ex. Windows Server 2016/2019/2022) with desktop experience (hello RDS). But this unfortunately introduced application compatibility issues when trying to run desktop-based apps on a server OS.  

AVD also introduced webcam/microphone optimizations for Teams, Zoom and multimedia redirection not found anywhere else. For example, you can play an 8K video on YouTube and not degrade your neighbor’s desktop experience. I dare you to try that with RDS! 

AVD is such a game-changer because Azure is the only way to run Windows 10/11 multi-session desktops, keeping costs low and the user experience high. This is a distinct competitive advantage for Microsoft and its partners.  

Advantages of Multi-Session-based Desktops  

The two biggest advantages of session-based desktops are cost reduction and easier management of your virtual desktop environment.  

Cost Reduction 

When looking at a personal desktop, or 1:1 VM ratio, resource utilization typically is only at 20% – 50% on average. This means 50% or more of the resources (RAM & CPU) are not being used, yet someone is incurring the full cost of these unused resources. Multi-session puts anywhere from 2-7 users on a VM so that average resource utilization is closer 80%.  

This is on purpose so that users still have resources to “burst” during times of abnormally high resource utilization across a company’s workforce. Overall, teams can still ensure they have the capacity to serve employees during peak usage periods while saving a lot of money that would otherwise be wasted.   

Easier Management  

Simply put – multi-session reduces the amount of VMs a team must manage. In a 30-user environment would you rather manage 30 VMs or one in a cost-efficient manner? If we run 30 users on one VM we have to monitor, re-image, license and patch one VM. If using dedicated, personal desktops we’d have to do all of this 30 times.  

Specific Use Cases for Personal Desktops, Dedicated VMs  

While session-based desktops can greatly optimize and streamline an AVD environment, in our experience there are certain use cases when a personal desktop is the best option.  

Local Admin Access  

If a user needs to be able to install their own apps or needs more granular access to make changes to their desktop, assign them a personal desktop. If this type of user were on a session-based desktop leveraging multi-session to share resources with others, the user’s changes will now impact everyone else sharing that VM.  

We often see this being the owners of SMB clients our partners serve. For example, a partner at a law firm doesn’t want to open ticket and contact their MSP every time they want to download a new app. Another common type of user we see assigning personal desktops are developers as they have constant needs for installing and uninstalling apps. 

Resource Hog  

Use dedicated desktops for the type of end user that no matter how much CPU, RAM you give them, they’ll consume it all. They are streaming videos, webinars, and operating with a ton of tabs open on their browser. To the example in our first point, if this person were to be on a session-based desktop, they’re stealing resources for everyone else sharing that VM.  

Application Restriction  

This use case is not super common, but one we see from time-to-time. Certain apps won’t work in multi-session environments. Certain apps (ex. AlphaCam) won’t work in multi-session environments because of the way they’re written. So, a personal desktop is the only option.  

Why Windows 365 Business Makes Sense for MSPs

Last year, Microsoft announced their new product, Windows 365. Windows 365 was created with the intent to move the operating system into the Microsoft Cloud and bring a user’s complete Windows experience to their personal or corporate devices. This innovative product is known as the Cloud PC.  Since it was announced, Nerdio has worked to incorporate Windows 365 into our offerings.  

Windows 365 is offered in two forms: Windows 365 Enterprise and Windows 365 Business. In typical Nerdio fashion, we have been able to support all of the new Windows 365 functionality released by Microsoft when they release it, if not prior. We integrated Windows 365 Enterprise upon rollout, and in February 2022, began offering deep integration with Windows 365 Business when the ability became available.  You can read more about Windows 365 via our dedicated page.

Why Windows 365 Business Is Suited to MSPs

For managed service providers (MSPs) working with smaller companies, Windows 365 Business may be a great fit to supply IT services while reducing the management load on your team. Windows 365 Business allows MSPs to provision Cloud PCs as standalone PCs in the Azure cloud without having to worry about networking or security groups, or provisioning policies.  

In addition, there is not a desktop image to manage in Windows 365 Business (unlike in Windows 365 Enterprise, in which you can have the Cloud PC provisioned from an image you have set up a certain way). Instead, Microsoft will provision a clean Windows 10 or Windows 11 install with the following apps already installed: Microsoft 365 Apps for Enterprise (the new name of the very familiar Office 365 Pro Plus), Microsoft Teams, OneDrive and Edge, and Microsoft Defender Antivirus. 

As an MSP, you can control if the user has the permissions to install additional apps by setting up their account on their Cloud PC as a standard user or local administrator (standard users can only install apps from the Microsoft store, whereas local administrators can install any software). However, this does allow the risk of a local administrator corrupting their Cloud PC with malware. As an MSP, you also have some options to administer users’ Cloud PCs. With Nerdio Manager, you can: remotely restart Cloud PCs or re-provision them to a clean slate, run a troubleshooting wizard that looks for connectivity issues, rename or view system specifications for Cloud PCs, view logs maintained by Nerdio Manager for any of the previous activity, and manage any combination of Windows 365 Business, Windows 365 Enterprise and Azure Virtual Desktop (AVD) for the same customer.  

How to Identify the Right Clients for Windows 365 Business

Windows 365 Business is typically used for small businesses. Usually, in these companies, the business owner doubles as the IT administrator of the company. Upon starting the company, it’s up to the business owner to figure out aspects of the business’ operations, and this includes IT responsibilities (setting up a domain, email, purchasing Office licenses, and a PC). As the company grows, these IT tasks remain the responsibility of the business owner, and those tasks can grow with the company as well, as smaller companies do not usually have an IT network or a domain controller. 

Windows 365 Business makes it easier for businesses of all sizes, particularly micro or very small businesses, to be a cloud-only company. If your client is currently considering moving to the cloud or has expressed a need for secure desktops that can be accessed from anywhere anytime, it would be worth educating them on how they could benefit from Windows 365 Business in your next QBR. However, Windows 365 is not always the solution. If your client has an elastic workforce or doesn’t need to have desktops ON and available all the time, you would likely serve their needs better with other virtual desktop services in Azure, such as AVD.  

Why Now Is The Time for Windows 365 Business Exploration and Investment  

With remote work and a distributed workforce, office networks seem like archaic IT infrastructure. We are moving from an office-centric IT to a cloud-first IT world. Technology, including Azure, are a rapidly changing territory. New features are being built into familiar technology almost every day, including Windows 365, which Microsoft is investing in and updating constantly. It remains to be seen how Windows 365 Business will be adopted, but yours truly won’t be surprised if it’s something that is seen in organizations with even a 100 employees & more. With upwards potential for adoption, your MSP can benefit from investing in Windows 365 Business now and creating a scalable model to take across clients as cloud interest and migration continue.  

Microsoft Azure Resources and Fundamentals: Azure Terminology and Hierarchy

In this post we’ll be going through some of the more important Microsoft Azure fundamentals and terminology, including product categories; accounts, tenants, and subscription types; resources and resource groups; and Azure object hierarchy.

Microsoft Azure Resources

The first step in building an MSP cloud practice with Microsoft Azure is deeply familiarizing yourself with Microsoft Azure’s fundamentals: its terminology, elements, and hierarchy.  Here we will list and define the most critical Azure elements and discuss how they interrelate with each other.   

In this section, we will focus exclusively on Azure Resource Manager (ARM), which is Microsoft’s latest and more current implementation of Azure.  Prior to ARM, Azure used a “Classic” model, which had significantly different terminology associated with it and is not relevant to the MSP community today. 

Microsoft Azure is a diverse cloud platform that contains hundreds of products (also known as SKUs).  Azure to Cloud is like Apple to devices–each has many SKUs within multiple categories. 

Microsoft Azure Categories 

These Azyure SKUs fall into many categories.  For instance: 

  • Infrastructure-as-a-Service (user-managed, raw resources that can be used to build IT environments)   
    For example: 
    • Virtual Machines 
    • Storage 
    • Networking 
  • Platform-as-a-Service (Microsoft-managed, use-specific, packaged offers designed to be the building blocks of applications)   
    For example: 
    • Azure SQL – Microsoft managed SQL service without a “server running SQL” that can be used as the database back-end for a new or existing application 
    • Azure Files – Microsoft managed SMB (CIFS) file share service that behaves just like a Windows file server but without a server to manage 
  • Data Services – things like machine learning, analytics, and cognitive services 
  • Software-as-a-Service – fully usable, end-user applications written, hosted, and managed by Microsoft
    • Office 365 
    • Dynamics 365 

We will focus on IaaS, SaaS, and somewhat on PaaS — as those are the most fundamental building blocks an MSP needs to build a cloud practice in Azure.  

Microsoft Azure Accounts, Tenants, and Subscriptions 

At the highest level is an Azure account, also known as a tenant or directory (these terms will be used interchangeably).  An Azure account is uniquely associated with an Azure Active Directory (AAD), where user objects that access the Azure Portal exist.  An Azure tenant is free to create, and by itself is simply a container for subscriptions and AAD objects.  You cannot run anything in an Azure account without a subscription.  Azure tenant names must be globally unique (i.e. no one else in the world can use the same name) and each one has a domain associated with it.   

Nerdio Tip: 

It is possible to use a single Azure tenant for all your customers’ infrastructure.  We will discuss below the advantages of doing so for flexibility of compute reservations.

Inside an Azure tenant there are subscriptions.  A single Azure tenant can contain multiple subscriptions, but each type of subscription must be contained within a single tenant.  A subscription is the “billing container”.  You obtain a subscription directly from Microsoft or through an Azure reseller and you can create resources inside of that subscription.  The monthly Azure invoice will contain the consumption of every resource you run inside of a subscription.  If you don’t run any resources and therefore have no consumption–-your bill is $0. 

Subscriptions come in many flavors, but the easiest way to think about them is an agreement between you and Microsoft that you will use any of the available Azure products under the terms of your subscription and you agree to pay for them after you’ve used them.  A good comparison is electrical power service in your home.  You open an account with the electricity provider (subscription), agree on a rate for electricity and delivery, use the electricity during a month, and then pay the bill once the power company tells you how much you have used or consumed. 

Subscriptions obtained directly from Microsoft will typically be Pay-as-you-go, Free, EA, CSP, or Sponsored. 

  • Pay-as-you-go (PAYG) â€“ if you sign up to use Azure on you will be required to put in a credit card.  This will be the agreed upon payment method for any resources consumed inside of your subscription and it be billed automatically on a monthly basis – at Azure’s list prices. 
  • Free â€“ this is limited subscription that you can obtain directly from to play around with Azure for a limited time and to consume up to $200 in resources usage.  This type of subscription is too limited to use for anything but a simple VM or two and is not recommended for MSPs looking to build cloud practices in Azure. 
  • EA (Enterprise Agreement) â€“ if your customer is a larger organization, they will likely have a direct volume licensing agreement with Microsoft that gets negotiated every few years with annual “True Ups”.  As part of this EA, the customer will have prepaid for a certain amount of Azure consumption (monetary commitment) and will be able to use resources in the subscription up to this amount.  Any overages will be reconciled at the time of the customer’s True Up with Microsoft. 
  • CSP â€“ if you are a Direct CSP with Microsoft, you can provision a CSP subscription for Azure inside of your customer’s tenant or your own tenant.  Microsoft will bill you for the usage (i.e. consumption) inside of this type of subscription – at your discounted reseller rate – and you will in turn bill your customer.  This is one of the most flexible and powerful Azure subscription types.   
  • Sponsored – if you are part of the Microsoft Partner Network (MPN) and have Silver or Gold competencies, Microsoft may provide you with a sponsored Azure subscription that you can use to hone your Azure skills, do demos for customers, and use internally.  Each subscription will have a preset monetary limit and you’ll be required to add a credit card to be used once you exceed the preset limits.  The details on your sponsored subscriptions, if you have any, can be obtained in your Partner Center under MPN or your Partner Development Manager (PDM).  A word of caution: do not use sponsored subscriptions for customer workloads.  Once you exceed your sponsored subscription limit, you will be billed at list rates on your credit card and there is no easy way to convert this subscription to CSP.  You will be forced to migrate actual resources to another subscription, which is a disruptive process. 

Most MSPs, however, purchase Azure through a CSP Provider (like Pax8, Sherweb, Ingram, Techdata, etc.).  The MSP in this scenario is known as a “CSP Reseller”.  Using the CSP Provider’s own portal, the MSP will be able to create a subscription to consume resources inside this subscription.  The CSP Provider will get a bill from Microsoft for the consumption and will in turn bill the MSP.  The MSP will then bill its customer for the Azure consumption. 

Subscriptions have globally unique IDs (GUID) associated with them.  They also have a friendly name that you can set to anything you want, and this name does not have to be unique.  As a matter of fact, you can have subscriptions with the same friendly name inside of the same tenant.  However, try to assign logical, unique names to each of your subscriptions to make things easier to manage. 

Carefully consider your subscription options before starting to deploy Azure resources, as changing subscription types later can be challenging or even impossible.   

Nerdio Tip: 

Become a CSP Reseller with your provider of choice and create a dedicated subscription for each of your customers under a single tenant.  This will provide you the optimal segregation of billing information on a per-customer basis but will allow you to take advantage of portability of Azure reservations between customers, since all subscriptions will be in the same account.  

Microsoft Azure Resource Groups

Below the Azure subscription are resource groups (RG).  These are logical groupings of resources in Azure that allow you to easily view and manage sets of resources associated with a single function.  For example, if you have two complex, multi-component applications A and B, you will want to split them up into resource groups (e.g. RG-A and RG-B) to logically group all the compute, storage, and networking for each application with other related components.   

Resource groups are not billing units.  You won’t be able to easily answer the question of “how much are the resources in resource group RG-A costing me” by looking at your Azure invoice.  These RGs are there for ease of management, resource organization, and isolation.  There are lots of resources in every Azure deployment so keeping things nice, tidy, and logical is very important. 

There could be multiple resource groups within a single subscription, but any one resource group can only be part of only one subscription.  Resource group names do not have to be globally unique, but must be unique within a single subscription. 

Finally, resources are created inside of a resource group, which is inside a subscription, which is inside a tenant.  What are resources?  It’s everything that does something in Azure.  Examples are virtual machines, virtual networks, disks, network cards, VPN gateways, IP addresses, etc.   

Microsoft Azure Usage and Billing

There are many categories of resources and each one has different configuration, usage and billing characteristics.  We will explore the most important elements in this and future write-ups.  For now, let’s focus on billing. 

Some resources will be billable while others won’t.  For example, a virtual machine (compute resource) will be billable while a virtual network interface (network resource) attached to a virtual machine will not be billable.   

Billing in Azure typically has a unit and frequency.  The easiest way to think about this is to go back to our electricity at home example.  Electric power is a resource, the unit is kWatt and frequency is hour.  We therefore have a pre-defined cost per kWatt-hour.  As we use electricity, there is a meter running that measures how many kWatt-hours we’ve used up and then the electric company sends us a bill for what we used.  Azure works the same way. For instance, a virtual machine (VM) is billed for compute capacity (unit) on a per-second basis (frequency).  Every time we start up (provision) a VM, a meter starts up and keeps track of how long this VM is running.  At the end of the month our invoice will show how many hours we used a particular type of VM and that’s what we owe either Microsoft directly or via a CSP.   

The key takeaway here is that each billable resource has a virtual “meter” that’s running any time the resource in “used” (this is defined differently for each type of resource).  If we stop the resource, we stop the meter and we are no longer billed.   

Nerdio Tip:

In future articles, we’ll learn how these meters can be stopped even if the resource is running.  For example, by using compute reservations and software subscriptions.

Microsoft Azure Object Hierarchy Overview  

To summarize, we learned the hierarchy of Azure objects and how the interact with each other: 

Azure account/tenant/directory 

  • Subscription A 
    • Resource Group 1 
      • Virtual machine (resource) 
        • Compute meter 
      • Premium SSD Managed disk (resource) 
        • Storage capacity meter 
    • Resource Group 2 
      • Virtual machine (resource) 
        • Compute meter 
      • Standard SSD Managed disk (resource) 
        • Storage capacity meter 
        • Storage operations meter 
  • Subscription B 
    • Resource Group 1 
      • Virtual machine (resource) 
        • Compute meter 
      • Virtual Network Interface (resource)
        • No billing meter
    • Resource Group 2 
      • Azure SQL (resource) 
        • vCPU meter OR 
        • DTU meter 
      • VPN Gateway (resource)
        • VPN gateway
        • Transfer meter

  Here’s a diagram to help you understand it all at a glance:

Familiarizing yourself with this set of core building blocks including Accounts, Tenants, Subscriptions, Resource Groups, Resources, and Billing options is the first step an MSP should take in determining the most efficient and cost-effective way to build a cloud IT practice in Microsoft Azure. 

Now, let’s dive deeper in Azure Resources. 

Microsoft Azure Resources  

As we stated above, the building blocks of an Azure IT environment are Resources.  These resources are organized into Resource Groups inside of an Azure subscription.  There are billable and non-billable resources.  Billable resources have a Meter attached to them that runs while the resource is provisioned.   

In this section, we will explore the three most common types of Azure resources used by MSPs when deploying IT environments: Compute (virtual machines), Storage, and Network. 

Every resource used in Azure must be deployed in a geographical location known as a Region.  An Azure region is a grouping of data centers located in a specific geographic location.  Microsoft is constantly growing its global footprint and adding data centers and regions.  At the time of this article, there are 54 regions available in 140 countries and the list is growing.  The most up-to-date map of regions can be viewed here

Azure resources deployed in the same region are interconnected with high speed connectivity (think LAN speeds).  Resources in different regions can still communicate with each other but are subject to additional WAN latency.  The latency depends on how far the regions are from each other.

Microsoft Azure Compute (Virtual Machines) 

Virtual Machines (VMs) in Azure come in predefined sizes that are called families or series.  An individual VM is often referred to as an instance.  Different VM families are designed for common use-cases and are comprised of certain amounts of CPU cores and GB of RAM.  It’s not possible to arbitrarily mix and match CPU cores and GB of RAM as can be done with Hyper-V and VMware.  Here, we will focus on the four most commonly used VM families by MSPs: Ds-series, B-series, Esv3-series, and NV-series. 


These are “general purpose” VMs that can be used for a wide variety of workloads.  There are three versions of the DS-series: v1, v2, and v3.  Only v2 and v3 should be used. 

  • Purpose: general applications (domain controllers, file servers, application servers, etc.) 
  • CPU clock speed: 2.4Ghz – 3.0GHz (with Intel Turbo Boost) 
  • CPU-to-RAM ratio 
    • V2 – 1:3.5GB (each CPU core gets 3.5GB of RAM) 
    • V3 – 1:4.0GB (each CPU core gets 4.0GB of RAM) 
  • Storage supported: Standard and Premium 
  • Approximate average list price per CPU 
    • V2 – $85/month 
    • V3 – $77/month 
  • Difference between V2 and V3 
    • V2 VMs use non-hyperthreaded vCPUs (1 vCPU per 1 physical CPU core), which is why they are slightly more expensive.  V2 VMs start at a single core size (DS1v2). 
    • V3 VMs use hyperthreaded vCPUs (2 vCPUs per 1 physical CPU), which is why they are less expensive.  V3 VMs start at a minimum of two vCPUs (D2sv3). 

Ds-series VMs are a good fit for workloads that require consistent CPU usage and are not very RAM hungry. 


These are “general purpose, high-memory” VMs that can be used for many workloads that are more RAM hungry rather than CPU hungry. 

  • Purpose: general, RAM bound applications (database servers, application servers, desktops, etc.) 
  • CPU clock speed: 2.3Ghz – 3.5Ghz (with Intel Turbo Boost) 
  • vCPU-to-RAM ratio: 1:8.0GB (each CPU gets 8.0GB of RAM) 
  • Storage supported: Standard and Premium 
  • Approximate average list price per CPU: $88/month 

Esv3-series VMs are very similar to Dsv3-series but have double the RAM per CPU and are about 15% more expensive.  They are ideal for workloads that consistently utilize the CPU and are memory hungry.  Examples are database servers and RDS session hosts. 


These are known as “burstable” VMs.  They are very useful but the way they work is a bit complicated.  B-series are used for non-CPU intensive workloads (e.g. domain controllers, file servers) and cost about 50% of an equivalently sized Ds-series VM.  The reason they’re cheaper is because Azure imposes a quota on how much of the total CPU cores can be used.  This quota is usually a fraction of the total available CPU.   

For instance, B2m’s quota is 60% of a single CPU, which is 30% of the 2 CPUs visible in the VM.  Every second that the VM is using less than its quota (less than 60% of a single CPU) it is “banking credits”.  These banked credits can be used to burst up to the total available CPUs (100% of 2 CPUs, in this example) when needed.  While bursting, the VM is consuming its banked credits.  Once credits run out, the VM’s CPU utilization is throttled down to its 60% quota. 

Why use B-series VMs?  They are cheaper.  For approximately the same price that you would pay for a Ds-series VM, you can get a B-series with double the CPUs and double the RAM.  However, they should only be used for workloads that are either not CPU intensive or “bursty”, meaning they only occasionally need all the CPU but most of the time the CPU is idle.   

For instance, an Active Directory domain controller is not utilizing its CPU very heavily on a regular basis.  However, when Windows Updates run, the VM will use all its available CPU horsepower.  B-series are perfect for Domain Controllers since they bank credits while idle and then consume them when needed to update or do some other CPU intensive task. 

  • Purpose: General, non-CPU intensive workloads (e.g. AD domain controllers, file servers) 
  • CPU clock speed: varies 
  • vCPU-to-RAM ratio: varies from 1:1 to 1:4 for VMs larger than B2s 
  • Storage supported: Standard and Premium 
  • Approximate average list price per CPU: ranges from $13/month to $40/month 

Nerdio Tips:

  • Don’t use B-series VMs for CPU intensive workloads 
  • When a B-series VM is first provisioned, it doesn’t have any banked credits and is subject to its quota limit on the CPU, which means it’s slow.  Once the VM is running idle for some time, credits get banked and the VM performance improves when it needs to burst. 
  • Don’t shut down B-series VMs overnight when they are not in use.  This will not allow the VMs to bank credits for the following day of usage.

These VMs are intended for special use-cases when a dedicated GPU is needed.  They include an NVIDIA GRID 2.0 Tesla GPU and are ideal for running graphically intensive workloads like AutoCAD, SolidWorks, and Revit.  These are very large and expensive VMs (starting at 6 CPUs and 56GB of RAM) and need to be used with caution and with a specific purpose in mind to not generate unpredictably large Azure compute consumption bills. 

  • Purpose: Graphically heavy, visual workloads inside of virtual desktop sessions 
  • vCPU-to-RAM ratio: 6:56GB (each 6 CPUs get 56GB of RAM) 
  • vCPU-to-GPU ratio: 6:1 (each 6 CPUs get 1 M60 GPU) 
  • Storage supported: Standard ONLY (note that Premium is not supported) 
  • Approximate average list price per CPU: $165/month 

Nerdio Tips:

  • Smallest VM is NV6 (6 CPU / 56GB RAM / 1 GPU) 
  • Since only Standard storage is supported, disk performance is not fast 
  • Not available in all Azure regions 
  • New NVv2 VMs are currently in preview and are going to have the following notable improvement once they are generally available. They will confer: 
    • 40% price reduction 
    • 2X RAM increase per CPU 
    • Support for Premium storage 

Anatomy of a VM 

Now that we understand the different types of VMs, let’s talk about how to use them.  The first important thing to understand is that VMs are not stand-alone resources.  For example, a VM must have an OS disk (and optionally data disks) attached to it, as well as a virtual network interface (vNIC).  A new VM can be created (deployed) using an existing OS disk and vNIC or new disk and vNIC can be created together with the VM.  If a VM is deleted, its data (i.e. OS and Data disks) are not deleted.  They remain as resource objects in Azure that are not attached to any VM.  More on Storage resources later. 

When deploying a VM, its OS disk must be based on an existing image and cannot be blank.  Since you don’t have console access to VMs in Azure, the OS cannot be installed on a “blank” OS disk.  The OS disk must already have the OS on it.  Images could be pulled from the Azure image library or you can create and upload your own custom image as a VHD file to Azure to be used for deploying a VM. 

All VMs also come with a temporary D: drive that has locally attached fast storage (SSD).  Keep in mind that this disk is temporary, and any data stored on it will likely be erased if the VM is ever shut down or moved to another Azure host in the background.   

Nerdio tip: Use this disk for the pagefile and temporary data, but be sure to never store anything you need to retain on the temporary disk. 

Allocated vs. Deallocated 

After you deploy a VM it becomes provisioned or allocated, meaning it is running on an Azure host, consuming Azure resources and you’re consequently being billed for every second that the VM is allocated.  To stop being billed for a running VM, you must stop it.  This process causes the VM to become deallocated, which means it is effectively powered off and is not consuming Azure resources.  It is possible to shut down a VM and still be paying for it because it stays allocated.  When you power off a VM from inside of the OS it shuts down, but Azure still sees it as allocated and you are being billed.  Be sure to stop VMs at the Azure level even if you shut them down at the OS level. 

Subscription Core Quotas 

Another important concept to mention when discussing VMs is subscription core quotas.  To prevent accidental or malicious use of Azure where many VMs are created and a large amount of consumption occurs, Microsoft imposes core quotas on subscriptions by default.   

The number of CPU cores that can be provisioned in a subscription in total and per VM family are limited.  For instance, a Free subscription has an overall core quota of 4.  Direct Pay-As-You-Go subscriptions have a default core quota of 10 and CSP subscriptions have a core quota of 20.  This means that with a CSP subscription you cannot provision more VMs whose total CPU cores exceed 20.  Be mindful of this limit.  To increase the core quota limit, you need to submit a request to Microsoft via the Azure portal for a core limit increase. 

Service Level Agreement

Finally, it is important to be aware that only some Azure VMs’ availability is covered by Microsoft’s Service Level Agreement (SLA).  VMs not covered by an SLA could be unexpectedly rebooted due to underlying Azure infrastructure upgrades or hardware failure.  It has become exceedingly rare to see VMs reboot in Azure, but it was not uncommon in the past. 

Presence of an SLA and the availability guarantee (e.g. 99.9% vs. 99.95% vs. 99.99%) is based on several factors that have to do with the type of storage the VM uses for its OS and data disks, as well as if it is deployed in an availability set or an availability zone.  You can learn more about the specifics here.  The diagram below summarizes the available protection options. 

For most situations relevant to an MSP, it is important to know that individual VMs (“Single VM” in Microsoft terms) that use any Standard storage disks are not covered by any SLA.  The chance of outage is very small and even if the VM reboots due to an underlying hardware failure it will restart very quickly elsewhere.  However, it is important to remember that no SLA applies. 

Critical VMs should use Premium storage only, which will provide them with a 99.9% availability guarantee and improved performance.  For additional availability guarantees, distributed workloads that can have multiple VMs participating in the same application, can be placed inside Availability Sets and will then be subject to 99.95% availability guarantee.   

An example of such a deployment may be Active Directory.  You can have two AD domain controllers in an Availability Set and your AD, as a whole, will have a guarantee of 99.95%.  This doesn’t mean that each domain controller VM has this guarantee.  Rather, the “application” (i.e. AD), as a whole, is guaranteed to be available 99.95% of the time. 

Microsoft Azure Storage 

Azure offers multiple storage options with different performance, redundancy, location and price characteristics.  It’s easy to get lost in all the available options and to clearly understand what type of storage should be used when.   

We will focus on three storage resources that are most commonly used by MSPs when deploying IT environments in Azure: Managed Disks, Backup Vaults, and Files

In addition to considering the type of storage resource, we need to understand the Data RedundancyPerformance, and Cost for each type of storage object.  

Data Redundancy 
  • LRS – Locally Redundant Storage 
  • Three redundant copies of data stored in one data center 
  • 99.99999999% (yes, 11 9’s) durability 
  • ZRS – Zone-Redundant Storage 
    • Three redundant copies of data stored across two or three data centers within the same Azure region 
    • 99.9999999999% (12 9’s) durability 
  • GRS – Geo-Redundant Storage 
    • Six total redundant copies of data;  three copies stored in one region and another three copies are asynchronously replicated to a second region 
    • 99.99999999999999% (that’s 16 9’s) durability  
  • ZRS – Zone-Redundant Storage 
    • Three redundant copies of data stored across two or three data centers within the same Azure region 
    • 99.9999999999% (12 9’s) durability 
  • RA-GRS – Read Access GRS.  This redundancy type is not relevant to the storage objects in this discussion 
Performance Tiers 

There are three Performance tiers: Standard, Premium, and Ultra.   

Standard storage utilizes inexpensive and slow HDD and recently Microsoft added Standard SSD, which doesn’t increase the average performance but makes it more consistent than HDD. 

Premium storage uses SSD disks and is fast.  This type of storage is best for most disk IO intensive applications such as databases and virtual desktops.  

Ultra SSD is a new type of storage for very high-performance, disk IO intensive applications.   

Storage Resources 

Now that we understand the redundancy and performance characteristics of Azure storage, let’s dive into the actual storage resources. 

Managed Disks are by far the most commonly used type of storage when deploying an IT environment in Azure using virtual machines.  Recall that each VM must have, at a minimum, an OS disk and sometimes one or more additional data disks.  These disks that get attached to a VM are known as Managed Disks in Azure.  There is an older type of disk called Unmanaged Disk, but for the purposes of our discussion we will stick to Managed Disks.   

If you’re interested in learning more about the differences between managed and unmanaged disks, click here

Managed disks are only available with LRS data redundancy since they are attached directly to VMs, and these VMs must be able to communicate with disks in a very high throughput, low latency way.  This is why managed disks and the VMs they’re attached to must be in the same region.  Disks come in Standard HDD, Standard SSD, Premium SSD, and Ultra SSD performance flavors.   

Let’s explore each type of managed disk in detail:  

  • Standard HDD (S-type disk – e.g. S4, S10, S20, etc.) 
    • Available sizes: 32GB – 32TB in discreet increments (e.g. 32GB, 64GB, 128GB, etc.) 
    • Billed on allocated space, not used space.  Creating an S-type disk of a certain size will result in a bill for the entire size, even if it completely unused. 
    • What you’re billed for: 
      • Capacity – approximately $0.048/GB/month 
      • Operations – $0.0005 per 10,000 transactions 
      • Performance: Up to 500 IOPS and up to 60MB/sec throughput (performance varies significantly and can often be far below this limit) 
    • When to use? 
      • Very low disk IO applications (e.g. ADFS proxy server) 
      • Test environments 
      • When VM is deallocated but you still want to keep it around, changing it to an S-type disk saves on storage costs 
  • Standard SSD (E-type disk – e.g. E4, E10, E20, etc.) 
    • Available sizes: 32GB – 32TB in discreet increments (e.g. 32GB, 64GB, 128GB, etc.) 
    • Billed on allocated space, not used space.  Creating an E-type disk of a certain size will result in a bill for the entire size, even if it completely unused. 
    • What you’re billed for: 
      • Capacity – approximately $0.075/GB/month 
      • Operations – $0.002 per 10,000 transactions 
      • Performance: Up to 500 IOPS and up to 60MB/sec throughput (more consistent performance than S-type disks) 
    • When to use? 
      • Best for most non-disk IO heavy applications because of nice balance between performance consistency and cost (e.g. domain controllers, file servers).  Not a good fit for high IO database servers. 
      • Production environments, if no SLA is needed 
      • Most VDI desktop workloads for typical users 
  • Premium SSD (P-type disk – e.g. P4, P10, P20, etc.) 
    • Available sizes: 32GB – 32TB in discreet increments (e.g. 32GB, 64GB, 128GB, etc.) 
    • Billed on allocated space, not used space.  Creating a P-type disk of a certain size will result in a bill for the entire size, even if it completely unused. 
    • What you’re billed for: 
      • Capacity – approximately $0.15/GB/month 
      • Operations – no transaction costs 
      • Performance: 120 – 7500 IOPS and 25MB/sec – 250MB/sec throughput 
    • When to use? 
      • Best disk performance for any disk IO intensive applications such as databases 
      • Great for power user virtual desktops and RDS session hosts with many users 
      • Expensive for data storage only when the VM is powered off.  Consider converting P to S or E disk if VM is being deallocated and data stored for archival purposes.
  • Ultra SSD 
    • High performance and high cost disk option for very disk IO intensive workloads 
    • Complex billing structure based on provisioned IOPS and throughput in addition to capacity storage 
    • Not commonly used with typical MSP workloads in Azure 

Backup Vaults, as the name implies, are used by the Azure Backup service to store backup snapshots.  It is a Block Blob storage container and its cost is based on actual consumption.  Currently, Azure backup supports only Standard HDD performance tiers and LRS and GRS data redundancy options.  The cost of backup vault storage is approximately $0.024/GB/month for LRS and 2X that amount for GRS storage. 

Azure Backup is most commonly used by MSPs to protect data on VMs running inside of an Azure IT environment but can also be used to back up data from on-premises systems.  To protect Azure VMs, the backup vault must reside in the same region as the VMs that are being backed up to it. 

Azure backup can be used to achieve compliance with requirements to save data in multiple geographic locations by selecting the GRS redundancy option when creating the backup vault.  This way, there will be multiple copies of the backup data in the same datacenter where the VMs reside as well as multiple copies in another paired region.  With GRS, Microsoft has pre-defined region pairs.  More information is available here.  

Azure Files 

Azure Files is a PaaS offering.  The easiest way to think about it is as a Microsoft-managed file server where you can create Windows shares and publish them out to the world.  These shares can then be mounted directly on Windows, Linux, and macOS devices, either on-premises or in cloud VMs without any special drivers.   

Azure Files supports LRS, ZRS and GRS storage and costs range from $0.06/GB/month to $0.10/GB/month plus the cost of operations ($0.015 to $0.03 per 10,000 transactions).  Azure Files is currently available with Standard storage only, which significantly limits its performance.  However, Premium storage support is in preview and should be available soon. 

In summary, Azure offers an almost endless list of storage options with varying redundancy, performance, and cost characteristics.  For MSPs, it is important to focus on the storage types that are commonly used for typical IT workloads (managed disks for VMs, Block Blob for Azure Backup and Azure Files for creating SMB shares) and avoid confusion around other storage types that are designed for developers creating applications and repositories. 


Azure’s flexibility when it comes to networking is vast and not without complexity.  Many network resources are for advanced use cases and for developers who are designing new applications.   

We will focus on 4 network resources that are most relevant to an MSP and the way they interrelate with each other: Virtual NetworksPublic IP AddressesNetwork Security Groups, and VPN Gateways. 

Before delving into the specifics of these network resources, we need to understand how Azure charges for data transfer (aka bandwidth).  The basic rule is that any data coming into an Azure data center is free while going out of an Azure region will be charged on a per GB basis.  It doesn’t matter if the data is leaving a region and going into another region or leaving a region and going into some other, non-Azure location.  In both cases, there is a charge.  However, data transfer within the same Azure region (even across different data centers) is free. 

Costs of Data Transfer 

How much does outbound data transfer cost?  The first 5GB in any given month are free and then it’s $0.05 to $0.087 per GB after that.  Let’s put things in perspective; a 10GB file being downloaded from an Azure hosted VM to your laptop will cost $0.87. 

It is important to note that Azure data transfer is not charged per mbps (using 95% percentile or some other method), but rather per transferred GB of data.  Let’s compare the two methods.   

Colocation Provider A charges $50/month for 1mbps of bandwidth using the 95% percentile method.  Assuming the line is utilized 95% for the entire month straight, that’s equivalent to 60sec/min*60min/hr*24hr/day*30.5days/month * (0.95 * 1mbps) = 2,503,440 megabits per month, or 305GB/month.  For the same amount of data transfer, Azure cost will be $26.48.   

Therefore, a useful number for cost comparison between “GB transferred” and “mbps” based pricing is $26 per fully utilized mbps line.  Since in a typical hosted IT environment the line is utilized only fractionally the cost of bandwidth in Azure is relatively low compared to the way other hosting and colocation providers charge for bandwidth. 

This data transfer fee applies to all methods of transfer: communicating with a VM in Azure, downloading a file from Azure Files, restoring from a backup to outside of the region where the backup vault resides, using site-to-site VPN, etc.  Anytime data leaves the boundaries of an Azure region, there is a charge. 

Networking Structure 

With the cost of data transfer out of the way, let’s delve into the way networking is structured in Azure.  At the top level there is a Virtual Network (vNet).  A vNet has an address space that you as an MSP can define (e.g.  All objects within a vNet must fall inside of this address space.  vNet also contains Subnets.  These subnets are a way to segment the vNet into smaller sections.  For instance, you could have a LAN and DMZ subnets within a vNet.   

  • vNet â€“ 
    • LAN subnet – 
  • DMZ subnet – 

Subnets that are part of a vNet can have virtual Network Interfaces (vNIC) attached to them.  These vNICs are then attached to a VM and this is the way VMs communicate with each other and the rest of the world. 


Each vNIC has an assigned private IP address (or addresses), DNS settings, an optional public IP address and other network interface properties.  In Azure, IP address and DNS settings are not set at the Windows level inside of a VM.  Rather, they are set at the vNIC level in Azure.  In Windows, the network adapter is set to DHCP and receives its settings from the vNIC that’s attached to it.  The vNIC itself could have a statically assigned IP address or a dynamic one given to it by Azure via DHCP. 

You can Peer (i.e., connect) different vNets together.  These vNets can be in the same Azure region or you can use Global vNet Peering to connect vNets in different regions. 

Public IP addresses are billable Azure resources that can be assigned to a vNIC.  There are dynamic IP addresses and static IP addresses.  Dynamic ones have a persistent DNS name that resolves to a dynamic IP, while a static IP address has a fixed IPv4 address and DNS name.  The cost of a public dynamic IP address is $3/month while the cost of a public static IP address is about $4/month.  Assigning a public IP address to a vNIC does not automatically expose the VM to the internet.  In order to make it accessible from the internet a Network Security Group rule must be applied.   

Network Security Groups (NSGs) are Azure’s basic network firewall.  They are non-billable network resources.  NSGs are groups of firewall rules that specify what’s allowed or denied into and out of a vNet.  If an NSG is assigned to a subnet its rules will apply to all VMs whose vNICs are part of this subnet.  Alternatively, NSGs can be assigned directly to a vNIC.  In that case, the NSG firewall rules will apply to this single VM only. 

VPN Gateway is a service that allows encrypted, site-to-site IPSec VPN connectivity from an on-premises network or another cloud to an Azure vNet.  VPN Gateways are Microsoft managed resources that get added to a special subnet in a vNet called the Gateway Subnet.  VPN Gateway is a billable network resource and pricing starts at $26/month for a basic gateway with a throughput limit of 100 mbps and support for up to 10 site-to-site VPN tunnels.  The largest VPN Gateway is $912/month and supports 1.25 Gbps of throughput with up to 30 tunnels. 

Microsoft Azure Fundamentals: Complete!

Nerdio empowers MSPs to build successful cloud practices in Azure. We’ll continue to keep up on the latest Azure news and releases and will keep this document up-to-date in the process.  Hopefully, these Microsoft Azure fundamentals helped you to get your head around what is, admittedly, a very complicated subject.