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Oversized Hosting Plan for Azure Functions
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Oversized Hosting Plan for Azure Functions
Stijn Depril
Service Category
Compute
Cloud Provider
Azure
Service Name
Inefficiency Type
Explanation

Teams often choose the Premium or App Service Plan for Azure Functions to avoid cold start delays or enable VNET connectivity, especially early in a project when performance concerns dominate. However, these decisions are rarely revisited—even as usage patterns change.

In practice, many workloads running on Premium or App Service Plans have low invocation frequency, minimal execution time, and no strict latency requirements. This leads to consistent spend on compute capacity that is largely idle. Because these plans still “work” and don’t cause reliability issues, the inefficiency is easy to overlook. Over time, this misalignment between hosting tier and actual usage creates significant invisible waste.

Relevant Billing Model

Azure Functions are billed differently depending on the hosting plan selected.

Detection
  • Identify Function Apps running on Premium or App Service Plans
  • Review invocation frequency and execution time to assess activity level
  • Compare provisioned capacity (instances, memory) against actual usage patterns
  • Check whether cold start latency is still a relevant concern for each workload
  • Evaluate whether functions require VNET integration or advanced features unique to Premium/App Service
  • Flag workloads with minimal activity that may not justify fixed-instance billing
Remediation
  • Move low-usage or non-critical Function Apps to the Consumption Plan
  • Pilot plan downgrades in non-production or latency-tolerant environments
  • Use cost modeling tools to estimate savings from switching to Consumption Plan
  • Establish a review process to re-evaluate plan fit periodically, checking changes in invocation frequency, execution duration, latency needs, VNET requirements, and cost vs: usage.
  • Document latency and feature requirements per workload to avoid defaulting to oversized plans
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