For Digital Native companies, every engineering decision is also a business decision. How you design your cloud architecture affects not just performance but also your burn rate, margins, and ultimately your ability to scale.
One of the most overlooked levers in Azure networking is Routing Preference, a simple setting that determines how your outbound internet traffic leaves Azure. The choice is binary:
- Microsoft Global Network (Premium): High-quality, low-latency routing on Microsoft’s backbone (default).
- ISP Transit (Internet Routing): Lower-cost routing via local ISPs.
Most startups never change the default, but understanding when to switch can save you serious money without sacrificing customer experience.
Why it matters for digital natives
Bandwidth is one of those quiet COGS items (Cost of Goods Sold, the direct cost of delivering your product to customers) that doesn’t make noise until the bill arrives. If your product depends on moving data, whether streaming, analytics, or SaaS APIs, outbound traffic is part of your unit economics.
Routing Preference is your toggle between performance and cost. Think of it as:
- Business class routing (Premium): smoother ride, higher price.
- Economy routing (ISP): cheaper seat, gets you there, but less predictable.
Pricing Snapshot
Outbound internet rates vary by region, and they differ sharply between routing options. For example (first 10 TB/month, beyond free 100 GB):
| Region | Microsoft Global Network (Premium) | ISP Transit (Internet Routing) |
|---|---|---|
| United States | $0.087 / GB | $0.04 / GB |
| Australia | $0.12 / GB | $0.06 / GB |
Which Azure resources support routing preference?
Routing Preference applies to any Azure resource backed by a Public IP, including:
- Virtual Machines (VMs)
- Virtual Machine Scale Sets (VMSS)
- Azure Kubernetes Service (AKS)
- Public Load Balancers (NIC-based backend)
- Application Gateway
- Azure Firewall
- Storage Accounts (Blob, Files, etc.)
How to configure it
Public IP Example (CLI)
az network public-ip create \
--name MyPublicIP \
--resource-group MyResourceGroup \
--location eastus \
--ip-tags 'RoutingPreference=Internet' \
--sku Standard \
--allocation-method Static \
--version IPv4
Docs:
A digital native playbook
Here’s a quick guide to help you decide:
| Scenario | Recommended Routing | Why |
|---|---|---|
| Latency-sensitive SaaS APIs | Premium (Global Network) | Predictable performance, better customer experience |
| Dev/Test environments | ISP Transit | Optimize cost where performance isn’t critical |
| Bulk log exports, backups | ISP Transit | Cut bandwidth costs significantly |
| Production workloads with end-users | Premium | Protect SLA and latency for customers |
Key takeaways
- By default, you’re paying for Premium routing whether you need it or not.
- ISP Transit can cut costs nearly in half, a huge win for cost-sensitive workloads.
- Routing Preference applies to VMs, AKS, Load Balancers, App Gateways, Firewalls, and Storage.
- The right choice depends on your growth stage and workload type: optimize for performance where it matters, optimize for cost everywhere else.
Closing
For digital natives, scaling is a balance: you need to delight customers while watching COGS. Routing Preference is a small Azure feature that gives you a big lever on both. Next time you spin up a VM, AKS cluster, or Storage account, don’t just go through defaults.
Ask: Do I want business class routing or economy? That one decision could save you thousands as you scale.
Microsoft