Azure API Management Premium runs at over £2,000 per month for a single-region deployment. For years it was the only SKU that supported full VNET integration, which is why most organisations that needed private API gateways ended up on it.
Microsoft released the Standard v2 SKU in April 2024. At launch it supported outbound VNET integration — APIM could reach backends in a private VNET — but the gateway itself was still publicly addressable. For organisations that needed full network isolation (private gateway AND private backends), that wasn't enough. We held off on migrating clients for exactly this reason.
That gap closed on 19 May 2025 when inbound private endpoint for Standard v2 went generally available. Standard v2 now supports both: inbound private endpoint exposing the gateway in your VNET, and outbound VNET integration to private backends. End-to-end network isolation, at around £500 per month.
The case for staying on Premium, for most organisations, became very thin.
What Premium gives you that Standard v2 doesn't
Premium SKU includes: multi-region deployment (active-active across Azure regions), built-in Redis cache, zone redundancy, self-hosted gateway, and capacity units for fine-grained scale.
These are real features. They matter for specific architectures: global APIs with latency requirements across regions, very high throughput scenarios, organisations with strict availability SLAs across availability zones.
For the majority of APIM deployments, none of these features are in use. VNET integration was the purchase driver, not multi-region active-active. The £1,500/month premium is paying for capabilities that are present in the subscription and unused.
What Standard v2 actually provides
Standard v2 uses a new compute model. Provisioning takes minutes rather than the 45-60 minutes typical of previous SKUs. As of May 2025, VNET integration works for both directions: inbound via private endpoint to the gateway, and outbound via VNET integration to private backends. That's the same network posture Premium offers for this use case.
The self-managed capacity unit model is replaced with simpler automatic scaling. Developer portal, API policies, subscriptions, and all standard gateway functionality are present.
For an organisation running a private API gateway in front of internal backends, Standard v2 covers the architecture without the Premium price tag.
The migration caveat
This isn't an in-place upgrade. Moving from Premium to Standard v2 requires deploying a new APIM instance, importing your API definitions, recreating subscriptions and products, updating backend configurations, and cutting over traffic. For a production APIM instance with many APIs and integrations, that's a meaningful engineering effort.
The saving is £2,000/month — £24,000/year. At medium engineering cost, the payback period is typically under three months.
The longer the migration is deferred, the more complex it becomes. APIs accumulate, integrations multiply, and institutional knowledge of the original configuration fades.
One specific pattern worth checking
Dev and test environments on Premium SKU. APIM Premium for a non-production environment is almost always an oversight rather than a deliberate decision. Developer SKU (no SLA, single unit) costs around £40/month and supports VNET integration via the same mechanism as Premium. For dev/test traffic, that's the right tier.
APIM tier review is part of our standard Azure cost assessment. If you're running Premium for VNET integration and haven't evaluated Standard v2, our free cost assessment can quantify the saving for your specific configuration.