Cost

Move Log Analytics to a commitment pricing tier

One change on the bill: when a Log Analytics workspace ingests a predictable volume of data every day, moving it off pay-as-you-go onto a commitment tier buys the same gigabytes at a lower unit price, with no change to retention, queries or alerting.

13 min·10 sections·AZURE

Last reviewed 18 June 2026

Commitment tiers: the basics

What does a Log Analytics workspace on the wrong pricing tier actually cost you?

Azure Monitor charges for the data a Log Analytics workspace ingests, and by default a workspace bills on the pay-as-you-go tier, called PerGB2018, where every gigabyte costs the same flat rate. That default is fine for a small or bursty workspace, but it leaves money on the table the moment ingestion becomes predictable. Once a workspace reliably takes in tens or hundreds of gigabytes a day, Azure offers a cheaper way to buy exactly the same data: a commitment tier.

A commitment tier is a daily reservation. You commit to a fixed daily volume, 100, 200, 300, 400, 500 GB a day and upward, and Microsoft sells those gigabytes at a lower unit price than pay-as-you-go. Microsoft documents the saving as up to roughly 30 per cent at the larger tiers versus the pay-as-you-go rate. Crucially, anything you ingest above the committed level is not penalised: the overage is billed at the same discounted per-gigabyte price as the tier itself, so you keep the discount on every gigabyte once you are past the break-even point.

This is one of the few cost levers in Azure that changes nothing about how the workspace behaves. The data you collect, the queries you run, the alerts you fire, the dashboards your team watches and the retention you keep are all identical. The only thing that changes is the unit price on the meter. Azure Advisor surfaces this as the 'Consider Changing Pricing Tier' recommendation under Azure Monitor, flagging workspaces whose recent ingestion would cost less on a commitment tier than they are paying on pay-as-you-go.

In this lesson you will learn how Azure Monitor prices Log Analytics ingestion, how commitment tiers lower the unit price for predictable workloads, how to read the Azure Advisor 'Consider Changing Pricing Tier' recommendation and the workspace's own 'Usage and estimated costs' blade, and how to move a workspace onto the right tier with the az CLI or Bicep without changing anything else about how it runs.

Fun fact

The overage that still keeps the discount

The detail that trips people up about commitment tiers is what happens when you go over the committed volume. People assume blowing past a 200 GB/day commitment must trigger an expensive penalty rate, so they avoid committing at all. The opposite is true: any ingestion above the committed level is billed at the same discounted per-gigabyte price as the tier you are on. A workspace on the 200 GB/day tier that ingests 300 GB in a day is simply billed as 1.5 units of that tier's rate, still cheaper per gigabyte than pay-as-you-go. The commitment is a floor you pay for, not a ceiling you get punished for crossing, which is exactly why sizing slightly under your typical volume is often the smarter move.

Finding workspaces on the wrong tier across a subscription

Priya runs the platform team at a growing SaaS company. Azure Advisor has flagged a 'Consider Changing Pricing Tier' recommendation on the central Log Analytics workspace, and the monthly Azure Monitor line has been climbing as more services pipe their logs and metrics into it.

Rather than act on the single Advisor card alone, Priya starts by listing which workspaces are still on the default pay-as-you-go SKU and roughly how much each ingests, so the candidates for a commitment tier can be separated from the small, bursty workspaces that should stay on pay-as-you-go.

Start by listing every workspace and its current pricing SKU. Anything still on PerGB2018 with steady volume is a commitment-tier candidate.

$ az monitor log-analytics workspace list --query "[].{name:name, rg:resourceGroup, sku:sku.name, level:sku.capacityReservationLevel}" -o table

Name Rg Sku Level

---------------- ---------------- ------------------- -------

central-logs platform-prod PerGB2018

sentinel-soc security-prod CapacityReservation 200

dev-sandbox sandbox-rg PerGB2018

# central-logs is pay-as-you-go with heavy steady ingestion: the prime candidate.

A high-volume workspace still on PerGB2018 is the saving. A small sandbox on PerGB2018 is correct as-is; do not commit a bursty workspace just to clear the card.

How Azure decides a workspace would be cheaper on a commitment tierdeep dive

A Log Analytics workspace carries a pricing SKU. The default is PerGB2018, the pay-as-you-go tier, where every ingested gigabyte bills at one flat rate. A commitment tier replaces that SKU name with CapacityReservation and adds a capacityReservationLevel, the committed daily volume in gigabytes. The valid levels are 100, 200, 300, 400, 500, 1000, 2000, 5000, 10000, 25000 and 50000 GB a day, and each higher level carries a lower effective unit price, which is how Microsoft documents savings of up to around 30 per cent versus pay-as-you-go at the larger tiers.

Each tier has a break-even daily ingestion: the volume above which paying the fixed daily commitment for that tier costs less than buying the same gigabytes at the pay-as-you-go rate. Azure Advisor evaluates a workspace's recent ingestion against these break-even points and raises the 'Consider Changing Pricing Tier' recommendation when a cheaper tier exists for the observed volume. The same comparison is visible directly on the workspace under 'Usage and estimated costs', which lists each tier's estimated monthly cost from the last 31 days of usage and marks the cheapest as the Recommended Tier.

The one mechanic to respect is the commitment period. When you select a commitment tier, you are locked in for 31 days before you can move to a lower tier or back to pay-as-you-go, and that 31-day clock resets each time you change the level. You can always increase a tier immediately. Because overage above the committed level is billed at the same discounted rate as the tier, the safe sizing strategy is to commit at or just below your typical daily volume rather than above it, so you are never paying for reserved headroom you do not use while still keeping the discount on everything you ingest over it.

What is the impact of leaving a workspace on pay-as-you-go?

The direct impact is a higher unit price on every gigabyte than you need to pay. A workspace that has been ingesting steadily above a commitment tier's break-even for months has been buying its monitoring data at the pay-as-you-go list price the whole time, when the identical data was available at a lower rate. The overpayment is silent because nothing breaks: the workspace works exactly as it always has, so the gap only shows up as a larger-than-necessary line on the bill.

The second-order impact is that the gap grows as the estate grows. Logging volume rises naturally as you add services, scale out, and onboard more telemetry, so a workspace that was correctly on pay-as-you-go when it was small drifts past commitment-tier break-even points without anyone deciding to. Left unreviewed, the workspace climbs the volume curve while staying on the most expensive per-gigabyte tier, widening the overpayment month after month.

There is no reliability or capability downside to staying on pay-as-you-go, which is precisely why it is easy to ignore. That makes commitment-tier review a pure cost-hygiene task: there is nothing to fear from the change and nothing forcing the change, so it depends entirely on someone periodically asking whether each workspace is still priced to its consumption.

How do you move a workspace to the right tier safely?

Treat this as a sizing exercise, not a guess. The order matters: confirm the workspace's steady volume and the recommended tier before you commit, because the 31-day floor means an oversized tier is money you cannot immediately reclaim.

1. Confirm the volume is steady

Look at the workspace's daily ingestion over the last 31 days. A commitment tier only saves money if volume is reliably above the tier's break-even. A workspace that is still ramping, highly seasonal, or expected to shrink should stay on pay-as-you-go until it settles, because the 31-day floor would lock you into a tier you might want to leave.

2. Read the recommended tier

Open 'Usage and estimated costs' on the workspace, or the Azure Advisor 'Consider Changing Pricing Tier' recommendation. Both compare each tier's estimated monthly cost against the last 31 days of usage and mark the cheapest as the Recommended Tier. That recommendation is your sizing target; trust it over a manual guess.

3. Size at or just below typical volume

Because overage above the committed level is billed at the same discounted rate, you do not need to size above your peak. Committing at or just under your typical daily volume captures the discount on everything you ingest, including the overage, without paying for reserved headroom you rarely use. Sizing too high wastes the commitment; sizing slightly low still saves.

4. Apply the change and note the 31-day floor

Set the SKU to CapacityReservation at the chosen level with the az CLI or Bicep. The change takes effect for billing and does not interrupt ingestion, queries or alerts. Record that the workspace is now under a 31-day commitment before it can be reduced or moved back, and that the clock resets on any further level change, so plan increases deliberately.

# 1. Confirm the workspace is still on pay-as-you-go (PerGB2018) before committing.
az monitor log-analytics workspace show \
  --resource-group platform-prod \
  --workspace-name central-logs \
  --query "sku" -o json

# 2. Move it to the Advisor-recommended commitment tier (here, 300 GB/day).
# Valid levels: 100 200 300 400 500 1000 2000 5000 10000 25000 50000
az monitor log-analytics workspace update \
  --resource-group platform-prod \
  --workspace-name central-logs \
  --sku CapacityReservation \
  --capacity-reservation-level 300

# To revert to pay-as-you-go after the 31-day commitment period:
#   az monitor log-analytics workspace update -g platform-prod \
#     -n central-logs --sku PerGB2018

Quick quiz

Question 1 of 5

Azure Advisor raises a 'Consider Changing Pricing Tier' recommendation on a Log Analytics workspace. What does it mean?

Keep learning

Go deeper on how Azure Monitor prices Log Analytics ingestion and how commitment tiers and dedicated clusters lower the unit price for predictable workloads.

You can now treat Log Analytics pricing as a lever rather than a default: read the Azure Advisor 'Consider Changing Pricing Tier' recommendation and the workspace's own 'Usage and estimated costs' blade, confirm volume is steady, size a commitment tier at or just below typical daily volume, and apply it with the az CLI or Bicep, knowing only the unit price changes and the one caveat is the 31-day commitment floor.

Back to the library

Commitment tiers: the savings view

A predictable, low-effort reduction in the Azure Monitor line of the bill with a fast payback

Log Analytics ingestion is often one of the larger and stealthier lines in an Azure bill, because logging volume grows quietly as the estate grows. A commitment tier is the rare optimisation that lowers the unit price without touching the product: you buy the same gigabytes for less, so the saving lands directly on the Azure Monitor line every month with no offsetting cost elsewhere.

The arithmetic is unusually clean for a finance partner to reason about. Each tier has a break-even point: a daily ingestion level above which the tier is cheaper than pay-as-you-go for the same data. If a workspace consistently ingests above a tier's break-even, moving to that tier saves money from the first full day, and the saving compounds every month it runs. Microsoft documents the headline saving as up to around 30 per cent versus pay-as-you-go at the larger tiers.

The only real consideration is the commitment itself: a tier carries a 31-day minimum before you can drop to a lower tier or back to pay-as-you-go, and that clock resets each time you change the level. So the finance question is not 'should we save money?', which is obvious, but 'is this workspace's ingestion stable enough to commit to for a month?' For a steady, growing production workspace the answer is almost always yes, and the payback is immediate.

This lesson is for the finance partner who sees a growing Azure Monitor line and an Advisor recommendation to change the pricing tier, and wants to know what it saves, how the break-even works, what the 31-day commitment actually obliges, and how to size the tier so the saving is real rather than theoretical.

Fun fact

The overage that still keeps the discount

How a finance partner frames the tier decision

Priya is the finance partner working with the platform team on Azure cost. The Azure Monitor line has grown for three straight months, and Advisor is recommending a pricing-tier change on the central workspace. The instinct is not to wave through the recommendation blind; it is to confirm the saving is real and durable. She pulls up the workspace's 'Usage and estimated costs' blade, which lists every tier with an estimated monthly cost based on the last 31 days of ingestion and labels the cheapest as the Recommended Tier. That gives her a concrete number: this workspace, at its current steady volume, costs less on the recommended commitment tier than on pay-as-you-go, every month.

Priya then maps the decision across the estate rather than treating it as one card. The central production workspace ingests well above the recommended tier's break-even and has done for months, so it is a clean saving to capture today. The security workspace is already on a 200 GB/day tier and is sized correctly. The dev sandbox is small and bursty and should stay on pay-as-you-go, because committing it would pay for headroom it does not use. The finance pack reads: 'One production workspace moves to its recommended commitment tier for an immediate recurring saving on the Azure Monitor line; the 31-day commitment is comfortably covered by a workload that has been steady for a quarter; the smaller workspaces are correctly left on pay-as-you-go.'

Why the pay-as-you-go default belongs on the savings register

The cost model here is one-directional: moving a steady, above-break-even workspace to its recommended commitment tier saves money from day one and keeps saving every month, with no offsetting cost and no change to the service. That makes it one of the cleanest recurring savings a finance partner can book, because the value is the difference between the pay-as-you-go rate and the committed rate on a volume you already know.

The risk to quantify is not a downside of acting but the cost of not acting: every month a high-volume workspace sits on pay-as-you-go is an avoidable overpayment that Advisor has already sized. Against that, the only thing to weigh is the 31-day commitment floor, which is a genuine consideration only for workspaces whose volume is volatile or expected to fall. For a stable production workspace the floor is irrelevant, the saving is immediate, and the payback is effectively the first month.

What finance can do about the tier gap

Finance cannot change a workspace SKU, but it owns the framing that turns an Advisor card into a sized, durable saving and stops the estate from drifting back onto list price as it grows. Three levers.

1. Book the saving as a recurring line, not a one-off

The value of a commitment tier is the monthly difference between the pay-as-you-go rate and the committed rate on a volume you already ingest. Record it as a recurring saving on the Azure Monitor line, sized from the 'Usage and estimated costs' estimate, so the win is visible every month and not lost the moment the card is dismissed. The headline reference point is Microsoft's documented saving of up to around 30 per cent versus pay-as-you-go at the larger tiers.

2. Gate the commitment on volume stability

The only real cost of getting this wrong is committing a workspace whose volume then falls, leaving you on a tier you cannot leave for 31 days. So make stability the gate: a workspace that has ingested steadily above the recommended tier's break-even for a quarter is a safe commit; one that is still ramping or seasonal stays on pay-as-you-go until it settles. The clock resets on every level change, so plan tier increases deliberately rather than nudging them up repeatedly.

3. Make tier review a standing check across workspaces

Logging volume rises as the estate grows, so a tier that was right last year drifts out of date. Put a periodic review on the cost calendar: list every workspace, its current SKU and whether its recent ingestion still matches its tier. The metric that belongs on the cost review is the number of workspaces priced to their consumption versus those sitting on pay-as-you-go above a break-even point, not the raw Azure Monitor total.

Quick quiz

Question 1 of 5

Advisor recommends a commitment tier for a steady production workspace. As the finance partner, how should you book the value?

Keep learning

Go deeper on how Azure Monitor prices Log Analytics ingestion and how commitment tiers and dedicated clusters lower the unit price for predictable workloads.

You have finished the finance view of commitment tiers. You know this is a one-directional saving: the same ingested data bought at a lower unit price, booked as a recurring reduction on the Azure Monitor line, with the only real consideration being the 31-day floor that bites only for unsettled workspaces. Next time an Advisor pricing-tier card lands on a steady workspace, you will size it from the estimate, gate it on volume stability, and book the saving as recurring rather than asking whether it is worth doing.

Back to the library

Commitment tiers: the headline

Buying the monitoring you already consume at a lower unit price, with no change to what the platform does

Monitoring data is something every modern estate consumes continuously, and the bill for it grows in step with the business. A commitment tier is the simplest possible cost win on that line: the same data, the same dashboards and alerts, bought at a lower unit price because the volume is predictable enough to reserve.

The leadership framing is that this is a pure savings decision with no trade-off in capability. Nothing about reliability, retention or visibility changes; only the unit price falls. The single thing to be deliberate about is the short commitment period, which is why the decision belongs to a workspace whose ingestion is stable rather than one that is still finding its level.

Treated as a portfolio, the question is how many workspaces across the estate are sitting on the default pay-as-you-go tier while ingesting at a level that would be cheaper committed. Each one is recurring savings that Azure Advisor has already quantified and that costs only a single configuration change to capture.

A short read for the leader who wants to understand why this is a no-trade-off savings lever, what the small commitment caveat is, and how to turn a single Advisor recommendation into a repeatable check across every workspace in the estate.

Fun fact

The overage that still keeps the discount

What it looks like when monitoring spend is priced to consumption

At a cost review the CFO noticed the Azure Monitor line had quietly become one of the larger recurring items and asked the obvious question: are we paying the best available price for the monitoring we already use? The honest answer at the time was that the main workspace had been left on the default pay-as-you-go tier since it was created, simply because nobody had revisited it as ingestion grew.

The platform team's response was to treat pricing tier as something you review as a workspace matures, not set once and forget. They checked the 'Usage and estimated costs' blade on every production workspace, moved the central one to its Advisor-recommended commitment tier for an immediate recurring saving, confirmed the security workspace was already sized right, and left the small sandbox workspaces on pay-as-you-go where that is genuinely cheaper. The next time the CFO asked, the answer had changed from 'we are on the default' to 'every steady workspace is priced to its consumption, the saving is recurring, and the only commitment is a 31-day floor we comfortably clear.' That shift, from paying the list price out of inertia to buying the same data at the right unit price, is the confidence signal this lever delivers, and it changes nothing about what the platform sees or keeps.

Why this is a standing portfolio question

Most cloud savings require a trade-off: turn something off, accept less headroom, or move to a less convenient option. This one does not. The same monitoring, the same retention and the same visibility cost less because the volume is predictable enough to reserve, so leaving steady workspaces on pay-as-you-go is simply leaving recurring savings on the table for no benefit.

The leadership value is in making it a standing question rather than a one-off. Workspaces grow, and a tier that was right last year may be one or two levels too low this year. A portfolio view, which workspaces are on which tier and whether each is sized to its current consumption, turns a single Advisor card into a repeatable saving the estate captures as it scales.

The leadership move on monitoring spend

The executive handle is not to approve each tier change individually; it is to require that monitoring spend is priced to consumption across the estate and reviewed as workspaces grow, on the record.

1. Treat it as a no-trade-off saving to capture promptly

This is the rare cost lever with no downside: the same data, retention and visibility at a lower unit price. Where a workspace has been steady above a commitment tier's break-even, the recurring saving is real and Advisor has already sized it, so the leadership instruction is simply to capture it promptly rather than let it accrue as avoidable overpayment.

2. Make pricing-tier review part of how workspaces mature

A workspace is rarely on the wrong tier on purpose; it drifts there as volume grows past where pay-as-you-go made sense. Ask that pricing tier is revisited as a workspace matures, the same way capacity and retention are, so the estate stays priced to its consumption instead of climbing the volume curve at list price.

3. Respect the one caveat: the 31-day commitment

The single thing to be deliberate about is the short commitment floor. Commit the steady, predictable workspaces, where the floor is irrelevant, and keep volatile or shrinking workspaces on pay-as-you-go until they settle. The goal is not to commit everything; it is to commit everything whose volume is stable enough that the floor never bites.

Quick quiz

Question 1 of 5

At a cost review you ask whether the estate is paying the best price for the monitoring it already consumes. What end state is the defensible answer?

Keep learning

Go deeper on how Azure Monitor prices Log Analytics ingestion and how commitment tiers and dedicated clusters lower the unit price for predictable workloads.

Two takeaways. Commitment tiers are the rare cost lever with no trade-off: the same monitoring, retention and visibility at a lower unit price, so steady workspaces left on pay-as-you-go are recurring savings left on the table. And the right posture is a standing portfolio question, revisited as workspaces grow, that commits the predictable workspaces and keeps the volatile ones on pay-as-you-go until they settle, with the 31-day floor the only thing to be deliberate about.

Back to the library

Part of the learning path Lock in Azure commitments

Move Log Analytics to a commitment pricing tier

Commitment tiers: the basics

The overage that still keeps the discount

Finding workspaces on the wrong tier across a subscription

How Azure decides a workspace would be cheaper on a commitment tierdeep dive

What is the impact of leaving a workspace on pay-as-you-go?

How do you move a workspace to the right tier safely?

1. Confirm the volume is steady

2. Read the recommended tier

3. Size at or just below typical volume

4. Apply the change and note the 31-day floor

Quick quiz

Keep learning

Commitment tiers: the savings view

The overage that still keeps the discount

How a finance partner frames the tier decision

Why the pay-as-you-go default belongs on the savings register

What finance can do about the tier gap

1. Book the saving as a recurring line, not a one-off

2. Gate the commitment on volume stability

3. Make tier review a standing check across workspaces

Quick quiz

Keep learning

Commitment tiers: the headline

The overage that still keeps the discount

What it looks like when monitoring spend is priced to consumption

Why this is a standing portfolio question

The leadership move on monitoring spend

1. Treat it as a no-trade-off saving to capture promptly

2. Make pricing-tier review part of how workspaces mature

3. Respect the one caveat: the 31-day commitment

Quick quiz

Keep learning

Related cost lessons