Azure cost optimization best practices for 2023

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Azure Cost Optimization Strategies

IT enterprises have been progressively migrating to cloud since some time now. Therefore it has become fundamental to emphasize most on the importance of setting apt budgets, accommodating cloud expenses and prioritizing savings. Azure platform being widely in use for its popularity and ease of use, has often lead to triggering high-cost bills that can tend to get unmanageable. In such scenarios, enterprises realise the loopholes that cloud adoptions without a set strategy usually end up creating. Hence, cost management and optimisation are gaining traction to not just minimise the cloud bills but also ensure maximising the return on investments (ROIs).

In this blog, we will talk about the various methods that efficiently help in managing Azure bills and significantly reduce cloud costs.

Introduction to cost saving techniques for Azure cloud

There are multiple techniques to control cloud costs as well as reduce the amount of time and effort required in easily yet effectively  implementing these methods on cloud. To successfully save costs on Azure cloud, the following parameters need to be check listed:

Cost optimisation in cloud is not a one-time process but a repetitive one and hence, it is vital to establish cloud visibility and accountability. It helps in tracking the cost of resources and ensures the actual expenses do not cross the set budget. The analysis and management of cloud costs provides a clear picture of the ways in which cloud bills can be optimized. Let us further look at how accountability of cloud costs can be tracked.

Understanding of the pricing models in Azure

The estimation of potential cost reduction is directly or indirectly dependent on the understanding of how payments of these resources actually work in Azure. The familiarity with the pricing structure and cloud spend trend will help you get closer to controlling cloud costs.

Below mentioned are the three pricing plans available in Azure for all types of scenarios – right from shifting to one major cloud service provider to deploying a multi-cloud environment or adopting an all-in-one Microsoft cloud platform.

  • On-demand or pay-as-you-go: It is known as one of the simplest and most flexible payment models. It does not need any upfront planning or commitment. On-demand allows you to instantly pay and opt for VMs whenever they are required where organisations can run their instances as long as they want, without any interruptions.
  • Reserved: This payment method allows users to reserve VM instances for one to three year(s) of tenure. It offers discounts of almost 72% when compared to on-demand pricing. Although there is upfront commitment in this payment model, it offers the option of exchanging or cancelling the same anytime based on the user requirement.
  • Spot pricing: Azure Spot VMs let the customers buy a fixed amount of compute capacity at a discount of around 90% as compared to pay-as-you-go model. However, the spot instances can be terminated by Microsoft at any point of time based on the capacity demands.

Popular tools for Cost Management and Optimisation

There are several tools available to predict and optimise the cloud spending. To list down a few:

  • Azure pricing calculator: Checking the pricing before deploying workloads on Azure will help to estimate cost saving opportunities. This calculator helps in identifying the most suitable scenarios for cost optimisation by experimenting combination of different service types and configurations.
  • Azure budgets: Budgets can be configured in the Azure portal based on the cloud spend analysis. It allows enterprise cloud teams to set up a budget or threshold for Azure users and groups. The alerts will get generated once the user passes this threshold. 
  • Azure advisor: It provides recommendations to reduce the cost on VMs.
  • Azure cost analysis: Azure portal has the provision to analyse the cost on daily or monthly basis through various data visualisation charts. This tool also forecasts future spending based on current configurations.
  • Azure resource manager: This tool helps to manage the rules over Azure resources, such as who can create resources and how they can be tagged.
  • Azure migrate: It is an end-to-end platform to assess the VMs for migration feasibility and the cost that will be incurred in the migration process.
  • Azure cost management: This tool is helpful in analysing and managing all costs related to Azure consumption and can perform in-depth analysis to make cost-conscious decisions.

Azure cost spend optimisation – Strategies for 2023

Apart from the popular tools that help analyse cost trends and enable recommendable actions, there are some best practices that can be followed to optimise overall costs as well.

  • Shut down unused resources: Identifying and shutting down idle virtual machines (VMs) can help save costs otherwise incurred from unused resources that are inoperative yet being paid for.
  • Right size resources (downsize or upgrade): Azure Advisor helps identify if resource provisioning is adequate and optimized. Under provisioning will lead to the risk of compromising on meeting needs whereas over provisioning leads to overspending on additional resources that are not required.
  • Autoscaling: If a resource is running at 1-5% of CPU optimization level, it is considered idle. Using autoscaling to set pre-defined rules for the databases, VMs and resources being used, enterprises can combine idle resources or set off on-demand scaling to lower expenses and optimize costs.
  • Manage Azure budgets: Cost estimation, allocation, reporting and alerts can be set, monitored and controlled via various cloud billing management tools. This helps enterprises stay aligned with set budgets while reducing Azure spending.
  • Tagging Azure resources: Resource tagging with the help of key and value pairs enables in keeping track of resource cost consumptions, so enterprises can take appropriate measures on effectively working on cost reduction.
  • Moving to right regions: The costs vary as per geographic regions or data centers opted for. Selecting regions that are most feasible and economical is the best way to decrease costs. Another option is to keep a check on cost estimations and move to any other suitable region to further cut down on Azure costs.
  • Conduct Azure well-architected audits: A well-architected audit (WAA) through its pillars of reliability, security, cost optimization, operational excellence and performance efficiency helps enterprises review and evaluate the Azure environment. The framework involves analysis across various cost parameters like cost estimates, requirements, consumption, provisioning of resources, cost monitoring and governance.
  • Establish FinOps practices: Building a cloud financial operations (FinOps) approach enables enterprises to measure and manage their cloud spends, align spends with set budgets, perform predictive analysis, generate cost optimization goals through advanced cost analytics and inculcate cost management best practices across the organization as a culture.

How Infinity Ensure can help follow these best practices

Post onboarding the Azure account on to Infinity Ensure, the autonomous governance tool assesses the entire cloud infrastructure of the account and offers recommendations for unused resources, rightsizing resources and reserving instances. It tells you exactly which instances or resources the user has to optimize or control, to bring down costs and realise maximised value from cloud. Infinity Ensure’s upcoming enhancements around budgeting and tagging strategies further enables users to set up appropriate budgets, keep track of them through defined parameters and trigger alerts when the account crosses the allocated budget for specific services or regions. On the other hand, the tagging functionality will soon enable users to tag multiple resources at a time.

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