5 Tips to Reducing Your Costs in Azure

Cost optimization is an ongoing process. Remember to regularly review your Azure usage, monitor spending, and adjust strategies as needed.

Carolyn Norton

Director of Cloud

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    Azure is a powerful and flexible cloud platform that offers a wide range of services and solutions for businesses of all sizes and industries. However, as with any cloud service, managing costs can be a challenge, especially if you are not aware of the best practices and tools available to optimize your spending. One of the biggest advantages of using a cloud platform like Azure is the ability to scale resources up or down based on demand. However, with great power comes great responsibility, and it is important to ensure that you are not overspending on unnecessary resources. Azure Logo

    We’ve found that a lot of organizations “set it and forget it,” meaning they set up their cloud environment, and maybe look at the budget once a year, but end up overpaying for things they don’t need. There may be just a couple of people within the organization who have access to look at the cloud infrastructure, but then they go on vacation or change roles and then the organization ends up overpaying. The budgeting principles that apply here are the same that have always applied: a team of people needs to stay on top of the cloud budget and utilization to avoid overpayment.  

    In this article, we will share five tips that can help you reduce your costs in Azure and get the most out of your cloud investment.  

    Tip 1: Optimize your resource sizes 

    One of the easiest ways to save money in Azure is to make sure you are using the right size and type of resources for your workloads. Azure offers a variety of options for compute, storage, networking, and other services, each with different performance and pricing characteristics. By choosing the optimal size and type of resources for your needs, you can avoid paying for more than you need or underutilizing your resources. You can use Azure’s performance monitoring and scaling features to adjust your resource sizes dynamically based on demand and usage patterns. You can also use Azure Advisor, a free service that provides personalized recommendations for optimizing your resources, to identify and resize any overprovisioned or underutilized resources. 

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    Azure Advisor, for example, monitors your virtual machine usage for seven days and then identifies underutilized virtual machines. Virtual machines whose CPU utilization is five percent or less and network usage is seven MB or less for four or more days are considered low-utilization virtual machines. The 5% or less CPU utilization setting is the default, but you can adjust the settings. Although some scenarios can result in low utilization by design, you can often save money by changing the size of your virtual machines to less expensive sizes. Your actual savings might vary if you choose a resize action. Let’s walk through an example of resizing a virtual machine.  

    In the list of recommendations, select the Right-size or shutdown underutilized virtual machines recommendation. In the list of virtual machine candidates, choose a virtual machine to resize and then select the virtual machine. The virtual machine’s details are shown so that you can verify the utilization metrics. The potential yearly savings value is what you can save if you shut down or remove the VM. Resizing a VM will probably save you money, but you won’t save the full amount of the potential yearly savings. 

    Tip 2: Use Azure’s pricing calculator to estimate costs before deployment  

    Another way to reduce your costs in Azure is to plan ahead and estimate your costs before you deploy your resources. Azure’s pricing calculator is a handy tool that allows you to select and configure the services you need and see the estimated monthly costs. You can also compare different pricing options, such as pay-as-you-go, reserved instances, spot instances, and hybrid benefits, to find the best fit for your budget and workload. By using the pricing calculator, you can avoid any surprises or hidden fees and ensure you are deploying your resources in the most cost-effective way. 

    Tip 3: Take advantage of Azure Reserved Instances for long-term savings 

    If you have predictable and consistent workloads that run for a long period of time, you can save up to 72% on your computing costs by using Azure Reserved Instances. Azure Reserved Instances are prepaid commitments that allow you to reserve computing capacity for a specific region and instance type for one or three years. By doing so, you can lock in a lower price and guarantee availability for your resources. You can also exchange or cancel your reserved instances at any time if your needs change. Azure Reserved Instances are available for virtual machines, SQL Database, Azure Synapse Analytics, and other services. 

    Tip 4: Clean up unused resources to avoid unnecessary charges 

    One of the common sources of wasted spending in Azure is unused or idle resources that are still running and accruing charges. These can include virtual machines, storage accounts, databases, networks, and other services that are no longer needed or used. To avoid paying for these resources, you should regularly review and delete any resources that are not in use. You can use Azure’s tagging feature to label and organize your resources by project, owner, environment, or other criteria, and use Azure Policy to enforce rules and policies for resource management. You can also use Azure’s automation and scripting features to schedule and automate the deletion or deallocation of resources based on certain conditions or triggers.  

    This happens more than you would think. One Velosio client was paying $1600 a month for unused resources – which adds up quickly. Just by deleting one resource, they saved $500 right off the bat. It’s about knowing where to look, and proactive alerting. For example, you can set up an alert to send you an email if the cloud cost increases by 5% or more, or any percentage you choose. One of our clients does a very good job of optimizing and rightsizing quarterly.   

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    Tip 5: Employ Azure’s Cost Management tools to monitor and control spending 


    Employee Costs icon

    The final tip to reduce your costs in Azure is to use Azure’s Cost Management tools to monitor and control your spending. Azure Cost Management is a suite of tools and services that help you track, analyze, and optimize your cloud costs. With Azure Cost Management, you can view and download your invoices and billing statements, set and manage budgets and alerts, allocate and distribute costs across your organization, and identify and implement cost-saving recommendations. You can also use Azure Cost Management to access the Azure Pricing API, which provides programmatic access to Azure’s pricing information. By using Azure Cost Management, you can gain visibility and insight into your cloud spending and reduce costs. Azure Cost Management is especially helpful for clients with a higher level of monthly spending. You can export information from Azure Cost Management to Excel if that’s the way you prefer to work. With Cost Management, one client was able to uncover that there was a third-party toolset that was not being used, and was something Azure had natively built in. They deduplicated the product for monthly cost savings.

    Creating a budget is a great way to manage your spending and ensure that you stay within your allocated budget. You can set budgets at the subscription or resource group level, and you can choose to receive email notifications when your spending exceeds a certain threshold. 

    Here are the steps to create a budget in Azure Cost Management:

    1. Navigate to the Azure portal and select the Cost Management + Billing option from the left-hand menu. 
    2. Select the Budgets option from the Cost Management + Billing menu. 
    3. Click on the + Add button to create a new budget. 
    4. Choose the scope for your budget (subscription or resource group). Defining scopes allows you to apply policies to specific resources within your Azure environment. You can define scopes at the subscription or resource group level, and you can use scopes to apply policies related to cost management, security, compliance, and more. 
    5. Apply the required filters. Applying filters allows you to analyze your usage data in Azure Cost Management. You can apply filters to your usage data to view specific metrics or to drill down into specific resources or time periods. 
    6. Set the amount for your budget and the time period that the budget covers. 
    7. Choose the email recipients who will receive notifications when your spending exceeds the budget. 

                Azure Cost Managing

                1. Click in Next to Set Alerts

                     9. Define Alert Conditions for Forecasted and Actual budgets. 

                  Managing Azure Costs

                1. Click Create to create the budget.

                View budgets in the Azure mobile app 

                You can view budgets for your subscriptions and resource groups from the Cost Management card in the Azure app. 

                1. Navigate to any subscription or resource group. 
                2. Find the Cost Management card and tap More. 
                3. Budgets load below the Current cost card. They’re sorted by descending order of usage. 


                    Remember that cost optimization is an ongoing process. Regularly review your Azure usage, monitor spending, and adjust your strategies as needed to achieve maximum cost savings. Any questions? We are here to help – Contact us today. 


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                    Carolyn Norton

                    Director of Cloud

                    Follow Me: