Best Practices For Optimizing Azure Costs

Within cloud computing, Microsoft Azure has established itself as a powerhouse platform for businesses seeking scalability and flexibility. However, with organizations expanding their presence in the cloud — cost management is becoming paramount. And, to navigate this intricate landscape successfully, adopting best practices for optimizing Azure costs is not just a strategy — it’s a necessity. Cloud cost optimization has become vital for companies to focus on, as it helps them monitor and control their cloud computing costs. A cloud optimization plan helps pay off cloud migration expenses and is essential for businesses to optimize and take advantage of cost and work-related benefits while increasing productivity. Companies can harness Azure’s potential while maintaining financial prudence by balancing resource allocation, monitoring, and thoughtful decision-making.

With this blog, I’ll delve into the top practices that can help enterprises to maximize their Azure investments while ensuring long-term financial sustainability.

What Is Cloud Cost Optimization?

Cloud cost optimization is a mix of strategies, techniques, tools, and best practices to reduce cloud computing costs while maximizing the business value of using the cloud.

Cloud optimization helps increase cloud efficiency by identifying and reducing excess resources and aligning the computing resources to specific applications and workloads in the cloud environment. Cloud optimization reduces overall expenses by identifying mismatched resources, eliminating resource wastage, and balancing requirements to ensure that applications can work efficiently and economically. Cloud optimizing is also about aligning costs with the organization’s business goals.

Below are some ways to optimize Azure cloud costs, such as Azure cost monitoring and tagging, while briefly discussing the methods.

Practical approaches for optimizing Azure costs

1. Identifying unused or unattached resources: Azure cloud costs can be optimized in many ways. Identifying new or idle resources is a critical practice that should be followed to achieve cost optimization. Tools like Azure Advisor help in Identifying unused or unattached resources, such as idle virtual machines (VMs) and ExpressRoute circuits, and recommend which resources can be shut down. The cost optimization strategy would be identifying and consolidating such resources’ use. Azure Advisor helps find underutilized resources and suggests recommendations for reconfiguring and reducing such resources. Azure’s resource group, a logical container for resources like network interfaces, IP addresses, storage volumes, and VMs, helps apply controls, monitor activity, and track costs for particular workloads. Administrators can allocate resources as per need and optimize expenses using this. An everyday use case is when a temporary server is set up to perform a function and then is not turned off after the job is finished resulting in running costs versus zero utilization or revenue or forgetting to remove the storage attached to terminated instances leads to continuous billing without revenue generation, which results in the organization getting billed for resources that it’s no longer using but is tied to. Identifying and removing such instances can be part of a cloud optimization strategy.
2. Spot instances: Cloud providers offer spot instances or spare compute capacity at a lower rate than on-demand instances. These can be purchased in auctions and are available for immediate use. These are best suited for cases like batch jobs or jobs that can be terminated quickly. Azure spot VMs provide considerable discounts for unused computing capacities, and individual spot VMs or VM Scale Sets (VMSS) can be purchased to help optimize costs.
3. Applying tags: Assigning key-value pairs to Azure resources enables organizations to categorize and group these resources under standard criteria such as departments, environments, projects, etc. Applying tags enables tracking, analyzing, and allocating resources across teams. It can also help implement policies and governance rules that can help control and optimize resource consumption and spending.
4. Using heat maps: Heat maps are visual tools that can show an increase or decrease in resource utilization and computing requirements, helping optimize cloud costs. They provide a visual summary of Azure updates related to charges and help find opportunities to reduce costs by deleting, resizing, or consolidating resources. This can be valuable in establishing a start-and-stop routine to reduce costs. Servers can be automated to schedule start-stop practices to optimize costs.
5. Autoscaling: Azure Elastic Database, a feature of Azure SQL Database, allows users to manage and scale multiple databases with unpredictable and varying usage patterns. It enables software-as-a-service (SaaS) developers to deliver performance for each database by optimizing the price-performance ratio for a group of databases. Autoscaling eases management overheads by exploiting cloud-computing environments’ elastic nature. It reduces the need for continuous monitoring of system performance. A software company can guide for implementation of Azure cloud best practices by providing tools and solutions for managing Azure workloads.
6. Reducing transfer costs: Azure Content Delivery Network, or Azure CDN, helps optimize costs by delivering content from services closest to end users. This helps reduce latency and bandwidth consumption. It follows a pay-as-you-go pricing model and allows users to pay for data transfer and CDN services they use. This flexibility eliminates the need for upfront investments or over-provisioning and helps users align costs with actual usage.

Conclusion

Azure provides capabilities and tools for cloud cost optimization. Azure cost optimization is an ongoing process essential for any organization to follow. Best practices such as using reserved instances, right-sizing resources, deleting unused resources, and applying tags and policies can reduce cloud spending and improve operational efficiency to achieve business goals. It also helps align the cloud strategy with Azure Well-Architected Framework and cost optimization pillar. Besides being a technical challenge, optimization of Azure costs can also be a cultural and organizational challenge. It requires communication, collaboration, and governance across the organization, its teams, and stakeholders.