The Ultimate Guide to Azure Cost Optimization
Microsoft Azure includes a range of services, around 200+, including virtual machines, different tiers of storage, databases, and so on. It enables you to scale your infrastructure limitlessly. But this luxury can cost you hundreds of thousands of dollars if you don’t understand the platform. In fact, many companies don’t realize it, unknowingly pouring 20–30% extra money that could have been saved if they knew the optimization practices.
It is evident from the Flexera Report on cloud that organizations quietly waste around 27–32% of their budget on cloud. Cloud cost overruns are a very common concern among businesses running on cloud, and Azure is no exception.
Organizations on cloud must know how to avoid wasteful spending and proactively manage their investments on cloud.
We will go through some of the standard practices, often employed by professionals, to optimize Azure costs.
An Overview of Azure Cost Optimization
It includes a set of practices for reducing wasteful spending on Microsoft Azure. Professionals working along with stockholders and managers build a strategy that includes a comprehensive plan of implementing strategic adjustments to identify and eliminate inefficiencies.
The main objective of cost optimization is to make sure you are not paying for something that you don’t need. Therefore, it requires both technical and analytical skills to trim unnecessary spending on the cloud.
In fact, Microsoft itself provides a suite of tools to manage ballooning costs, which we will talk about later in this article.
Without a proper understanding of the cloud platform you are using, costs are likely to shoot up. In fact, cloud optimization itself is a demanding job.
Importance of Azure Cost Optimization
These azure best practices save you from spending on irrelevant services, eliminating unnecessary investment.
You can forecast cloud spending more precisely, improving financial planning.
Before you get into practices, let’s take a high-level overview of the critical components that affect cloud cost if managed poorly.
Top 10 Azure Cost Optimization Techniques
1. Right-sizing Resources
Pick a service required for your specific work. Your app is on an Azure VM sized D4s_v3 (4 vCPUs, 16 GB RAM). Monitoring shows average CPU at 10–15% and memory at 30%. This means the VM is over-provisioned.
Tools like Azure Monitor help you track memory usage. There is a tool called Azure Advisor which you can use to get recommendations for resizing.
2. Use Reserved Instances
With Reserved Instances (Ris), you can unlock more savings. Use Ris for virtual machines, applications, and servers requiring steady performance. Moreover, if you commit to more than a one-year term, you can save further.
3. Azure Hybrid to Reduce Licensing Cost
Azure Hybrid lets you use on-prem Windows Server and SQR Server licenses in Azure, so you pay only for the underlying compute. With this, you bring your existing licenses, eventually avoiding paying twice.
4. Spot VM for Non-critical workload
Azure Spot virtual machines (VMs) use unused capacity for non-critical workloads. They can technically be around 90% cheaper than regular VMs. Decent for temporary, non-critical workloads, such as batch jobs, data processing, they are inexpensive options.
You can use them with Virtual Machine Scale Sets and Azure Batch to automatically scale up or down.
5. Activate Auto-scaling
Auto-scaling increases the capacity when the load is up and reduces it when it is down. This means you are not paying for peak capacity round-the-clock. Enable if your workload is unpredictable. For example, if traffic is time-based, you don’t want to over-provision for the busiest moment.
It generally cuts down spending on cloud by keeping everything sized. But if the minimum instance count is set too high, and there are no policies on how to shrink, then it can waste money. Review the polices in place for scaling periodically.
6. Use Azure Cost Management
With this tool, you will have better clarity over cloud spending. You can see costs by azure subscription, resource group, tag, etc. It provides tools for budget, alerts, insights, and trends that professionals can act on.
For example, if you have a set budget, let’s say $5k, it will streamline tracking how you are moving against the limit. Plus, features for cost analysis by region, services, and tags, help make the optimization strategy easier.
7. Use Storage Tiering
For different needs, Azure has multiple storage tiers, including Hot, Cool, Archive, Premium, Standard, and Basic. They are tiered performance-wise. The premium tier has the highest cost per GB, ideal for frequently accessed data. Instead of keeping data entirely in the highest tier, move frequently accessed data to the lower tier.
8. Automate Shutdowns
Why pay when nobody is using it? You can automate shutdowns of the environment that is not being used by real users. Examples are development, test/QA, and staging prod, mainly used by internal teams, and if left running 24*7, then they add to the cloud bill.
Their downtime doesn’t hurt the real users; therefore, an automated shutdown can be a smart move to save costs. Use Azure automation to schedule operations.
9. Use Role-based Access Control
RBAC, or rule-based access control, allows building mechanisms in which only authorized users can scale down or up expensive services. You can set permissions, limit what they can access, and create.
10. Use Serverless for Event-driven process
Serverless is cheaper for an event-driven process. You can pay when an event is triggered, not for the idle servers. Serverless services like Azure Functions and Azure Logic Apps run processes when any event is triggered, or a process like an HTTP call, a queue message, or a file upload happens. With VMs or App Services, you pay per hour whether traffic is high, low, or zero; with serverless, you pay per execution.
Top 3 Tools for Azure Cost Optimization
- Azure Cost Management
- Azure Advisor
- Azure Pricing Calculator
A few tools we have already discussed earlier. Tools, such as Azure Cost Management and Azure Pricing Calculator, allow you to forecast, budget, predict, calculate spending, and fine-tune planning accordingly. Moreover, Azure Advisor is popularly used by experts for performance, cost, and security recommendations.
Final Thoughts
Cost optimization is a strategic process that requires analytical and technical expertise to utilize the cloud to the fullest, at the lowest possible budget. The process is continuous and requires non-stop supervision. These are a few common approaches we have compiled that experts use to cut down on cloud bills. It is recommended to consult with Microsoft Certified Azure Experts to get the most out of the cloud for your business.
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