Azure Functions Premium Plan: Complete Performance and Cost Guide

The Azure Functions Premium Plan (EP1, EP2, EP3) eliminates the pain points of the Consumption plan: cold starts, 10-minute timeouts, and limited VNET connectivity. However, Premium comes at a significant cost premium, and choosing incorrectly can result in either poor performance or wasted spend. This guide provides a data-driven approach to deciding when Premium makes sense, how to configure it optimally, and how to monitor costs effectively.

Understanding Premium Plan Architecture

Unlike Consumption (which provisions instances on-demand), Premium maintains a pool of pre-warmed instances called “Always Ready” instances. When your function is invoked, one of these pre-warmed instances handles it immediately—no cold start.

flowchart TB
    subgraph Premium ["Premium Plan Pool"]
        AR1["Always Ready Instance 1"]
        AR2["Always Ready Instance 2"]
        B1["Burst Instance (on-demand)"]
        B2["Burst Instance (on-demand)"]
        B3["Burst Instance (on-demand)"]
    end
    
    Request["Incoming Request"] --> LB["Load Balancer"]
    LB --> AR1
    LB --> AR2
    LB -.->|Overflow| B1
    
    style AR1 fill:#C8E6C9,stroke:#2E7D32
    style AR2 fill:#C8E6C9,stroke:#2E7D32
    style B1 fill:#FFF3E0,stroke:#E65100

You pay for Always Ready instances 24/7. Burst instances are billed per-second when active. The key to cost optimization is minimizing Always Ready instances while maintaining acceptable latency SLAs.

Plan Comparison

Configuration: Always Ready Instances

The minimumElasticInstanceCount setting controls how many instances are always warm:

{
  "name": "WEBSITE_MINIMUM_ELASTIC_INSTANCE_COUNT",
  "value": "2"
}

Or in Bicep:

resource functionApp 'Microsoft.Web/sites@2022-03-01' = {
  name: 'myfunction'
  location: location
  kind: 'functionapp,linux'
  properties: {
    serverFarmId: premiumPlan.id
    siteConfig: {
      linuxFxVersion: 'DOTNET-ISOLATED|6.0'
      functionAppScaleLimit: 20 // Maximum burst instances
      minimumElasticInstanceCount: 2 // Always-ready instances
    }
  }
}

When to Choose Premium

Premium makes financial sense when:

1. Consistent Load (>10 req/sec average)

At approximately 10 requests per second sustained, the cost of Premium instances is offset by the per-execution savings.

2. Latency-Sensitive Workloads

If cold starts are unacceptable (APIs with SLAs), Premium is the only Serverless option. Alternatively, consider Azure Container Apps.

3. VNET Requirements

Accessing private resources (Azure SQL with Private Endpoint, on-premises via ExpressRoute) requires Premium or App Service.

4. Long-Running Operations

Consumption times out at 10 minutes. Premium supports 60 minutes (Linux) or unlimited (Durable Functions).

Cost Optimization Strategies

Right-Size Your Plan

Most functions don’t need EP2 or EP3. Start with EP1 and scale horizontally (more instances) rather than vertically (bigger instances).

Use Deployment Slots

Production slot has Always Ready instances. Staging slot can have 0, saving 50% during non-production hours.

Monitor with Cost Analysis

// Azure Monitor query for Function execution metrics
AppMetrics
| where Name == "FunctionExecutionCount"
| summarize Executions = sum(Sum) by bin(TimeGenerated, 1h)
| order by TimeGenerated desc

VNET Integration Setup

Premium’s VNET integration allows outbound connections to private resources:

resource functionApp 'Microsoft.Web/sites@2022-03-01' = {
  // ...
  properties: {
    virtualNetworkSubnetId: subnet.id
    vnetRouteAllEnabled: true // Route ALL outbound traffic through VNET
  }
}

resource networkConfig 'Microsoft.Web/sites/networkConfig@2022-03-01' = {
  parent: functionApp
  name: 'virtualNetwork'
  properties: {
    subnetResourceId: subnet.id
    swiftSupported: true
  }
}

Key Takeaways

• Premium eliminates cold starts with Always Ready instances
• Start with EP1 and scale horizontally
• Break-even is approximately 10 req/sec sustained load
• Required for VNET connectivity and >10 min execution
• Use deployment slots to reduce non-production costs
• Monitor execution counts to right-size instance count