Azure Cost Management: How to effectively optimize your resource spend

I remember that first feeling, closing my first infrastructure modernization deal, pitching the great features available on Microsoft’s Cloud opposed to other competing products. Exciting as it may have seemed, maintaining the resource spend as promised to my customer wasn’t as easy as I had initially hoped. The first invoice landed, and every aspect of the billed resources had been scrutinized. Scrutinized to such an extent that I had doubts in my well-architected IaaS environment for my customer’s needs. The costs were simply too high!

A good understanding of cost-effective use of VM instances, Storage options, cheaper networking methods, and effective cost management is key in any Azure cloud environment, especially if your main sales pitch is to save on IT related infrastructure costs. Luckily, Microsoft had developed key cost management tools and innovated on this subject as it brings further opportunities and increases cloud adoption, especially in less developed countries in Africa, where the daily struggle is to deal with the ever-fluctuating rate of exchange to afford cloud technologies.

Microsoft also relies on their partners and their customers to better understand where they’re accruing costs and how to manage them better by identifying bad spending patterns, and to optimize costs to help empower to do more with less.

What is cost management? In lay man terms, cost management is a tool used to save on Azure resource costs by adopting certain key methodologies and processes and for those that require some detail, it’s the strategic approach to identifying, analyzing, and controlling costs throughout the entire business lifecycle to optimize resource allocation and maximize profitability.

I have already covered, in a previous Blog, how our ITMS portal is a great way to track and monitor your customers spend. But let’s find out ways what else is there to help save on costs. Microsoft provides several cost management features to control, and optimize their Azure spending:

- Azure Advisor: This integrates with Azure Cost Management to provide personalized recommendations on how to reduce costs by optimizing resource usage. These suggestions can include downsizing or shutting down underutilized instances, buying reserved instances for long-running workloads. A great feature which will soon get an added flavor of Co-pilot.

- Azure Reservations: Allows the purchase of qualifying Azure resources at a discounted price by committing to a one-year or three-year term. This can be done to virtual machines, SQL databases, Azure Cosmos DB and some storage types.

- Azure Savings Plans: This pricing model offers discounts on compute services when you commit to a fixed hourly spend for one or three years as an alternative to reserved instances.

- Azure Hybrid Benefit: Provides cost savings by leveraging existing licenses for Azure virtual machines and SQL databases and helps reduce Azure infrastructure costs for hybrid environments.

What else can be done to optimize spend? Another form of optimization is to look at the actual solution being hosted. Has the architecture been scrutinized for ineffective configurations? Has an over-sized instance type been chosen for the solution? Is your storage allocation more than what is required? These are common questions to be posed to your team whenever a cost management discussion arises.

What instance type should be best for my customer? If you're new to Azure and want to move your applications or workloads to the cloud without significantly altering the structure, you can utilize virtual machines or multiple VMs in Azure. Azure boasts an extensive selection of virtual machines designed to provide the necessary scalability and performance. Additionally, you have the option to deploy your workloads to Azure Dedicated Hosts with landing zones which offer single tenant physical servers exclusively for your organization. This makes Azure effectively function as an extension of your own physical data center in the cloud. The main benefit of running your solution in Azure is choice. Even these options need to be cross checked and optimized for efficiency and cost effectiveness for maximum return on investment.

How can I best optimize VM usage? While reaching 100% VM usage is not always achievable, striving for this level can help optimize VM costs. To attain near-maximum VM usage, I suggest employing Azure Monitor for tracking metrics and leveraging auto-scaling to dynamically add or remove machines based on your current utilization rate. Autoscaling, when integrated with personalized scheduling, can significantly benefit your Azure environment by enhancing flexibility and, ultimately, boosting cost savings.

Even though this method appears straightforward, we advise conducting a comprehensive review of usage trends and accessibility, which will enable you to develop an enhanced start/stop plan for your virtual machines.

Have any unused Disks or using different storage models? In Azure, virtual disks are not automatically deleted when you delete a virtual machine. Instead, they continue to incur costs. I recommend locating and deleting unused virtual disks. For each virtual disk, check the VM owner information. If the disk is not being used by any VM, it can potentially be deleted, as it is not serving any active purpose.

Storage is frequently one of the largest components of ongoing Azure costs. Optimizing this aspect of your Azure deployment can lead to substantial reductions in your overall operational expenses. Especially in Azure backup and Azure Blob Storage. This offers Premium, Hot, Cool and Archive storage tiers, each with appropriate pricing per GB a month. Using the right storage tier for the right type of data can be very cost-effective.

For instance, storing data that you access less frequently on a lower-cost storage tier is a good automation practice. This decreases your monthly costs and can lead to significant cost savings in the long run.

There are many strategies for cutting down on Microsoft Azure expenses, which most rely on your customer’s specific workload, objectives, available resources, and approach. If you still have questions regarding the optimization of Azure related costs or would like a different perspective on architecture, feel free to contact your Surestep Ambassador team for more information at This email address is being protected from spambots. You need JavaScript enabled to view it..