Azure Cost Best Practice Habits to Instill in your Team

Explore what you and your team can do to reduce and maintain spending efficiently in your Azure environment.

We’ve established that one thing that makes moving to a cloud environment so great is that you won’t have to worry about paying for physical infrastructures and servers that you might not always need. With Azure, you only pay for what you use, but that doesn’t mean it isn’t easy for costs to start piling up again.

Azure bills are normally dealt with automatically by your finance department. So, when you set your annual budget at the start of the financial year, it’s easy to lose track of your Azure spending until your next budget meeting. When you do end up getting around to it, you may find a very big, unpleasant surprise.

So how do you use your Azure resources efficiently? Well, there’s plenty of methods out there for building a cost-efficient yet scalable cloud environment and we’ve gathered some of our top tips as well to help with cost optimisation.

Table of Contents

1. Forecasting Cloud Costs

2. Pricing offers & Free Tools

3. Implementing Cost-Saving Habits in your Team

1. Forecasting Cloud Costs

You have to understand your cloud spending before you attempt to reduce it. This is something that’s easily overlooked by many people! It’s not just knowing the amount you’re spending, it’s also about identifying why the cost is higher than usual and estimating your future expenditure.

First, you’ll want to review your Azure spending. The Azure invoice can be hard to comprehend in its electronic version, as it doesn’t give you much clarity on the amount you’ve spent on a resource. If you have to do a chargeback for a resource, you’re going to need more than just the invoice.

Fortunately, CloudClarity has a tool to shed light on your spending patterns known as Cost Summary. This can view your expenditure through various filters and scopes, which can assist you with better understanding whereabouts you use the most resources. Grouping cost by product, project, department, environment or tags will give you an idea of where unnecessary spending is occurring and why. You can also view and download reports based on chosen filters or scopes to show to colleagues or higher-ups.

Great! Now we understand how to properly review cloud expenditure. But what about predicting Azure costs?

This is something you need to get into the habit of when you find yourself in the planning phase for new products, projects or upgrades. You can use The Pricing Calculator, but it won’t be of as much use if you don’t have an accurate gauge of how much you’ll be spending on specific resources. Without this, your cost estimate isn’t going to be very accurate.

That’s why we emphasized the importance of understanding your costs before you try to predict them. But if you do find yourself starting a new project while not being completely certain of your resource load, make an estimate and then add a 10–20% margin on top of that. Most likely your prediction will be off, but hopefully, with the additional margin, you’ll overestimating cost rather than underestimating it. The more you do it, the better you’ll get at this.

Now, let’s implement Azure budget alerts.

Once you’ve got a good idea of your cloud costs and can predict future expenditure, you can look into setting alerts for budgets to keep you on the right path. This can be done through Azure Cost Management + Billing (ACM) or other third-party tools.

Afterwards, you can choose whether or not you’d like to be notified when your spending reaches a set threshold in the budget. If you find yourself reaching this threshold much earlier than anticipated, it might be time to investigate the reason behind your spending being much more than anticipated. It can be an issue with estimates or the cloud environment itself.

Another way to optimise costs is through Azure policies. These policies seek to make sure that the correct types of resources are being deployed by the correct people in the correct environment.

2. Pricing Offers & Free Tools

There’s a variety of free tools and special offers provided by Microsoft for Azure users. It’s important to make yourself aware of these in case any can be applicable to your business.

Cost Saving Tools

Microsoft has some really good tools for identifying and suggesting cost optimisations within your Azure. You can once again turn to ACM, specifically the Azure Advisor feature within this, to identify areas where money can be saved. CloudClarity can also assist with this in a much faster and clearer fashion. These recommendations can be studied to find any unused resources that need to be deleted or underused resources that can be converted to a more appropriate size.

Best Practice Tools

Tools, such as Azure Well-Architected Framework and CloudClarity, can offer guidelines to assist with building an efficient cloud environment. This framework provides advice in five specific areas:

· Cost management

· Security

· Reliability

· Operational quality

· Performance effectiveness

You can develop solutions centred around each of the five areas mentioned above, which is very helpful for not only managing costs but also for other factors involved in cloud management.

Pricing Offers

Currently, Microsoft has various payment plans, special offers and licensing for Azure, which you’ll need to stay on top of if you want to take advantage of eligible deals. You can also save costs by reserving VM instances. This means you’ll be paying a lower price for 1–3 year reservations for your VMS, as opposed to the usual pay as you use style. You can save up to 72% by switching to this payment method. Not only that, but reservations can also be split into smaller parts or instance size flexibilities changed even after purchase.

Dev/Test pricing offers are also provided by Azure for developers to have access to the correct tools needed for constant Azure growth. This is composed of:

· Zero Microsoft software charges on VMs

· Pricing discounts for dev/test on numerous Azure services

· Access to Azure Virtual Desktop (AVD)

All that is required of you is to place your dev/test environments into their subscriptions and have a currently active Visual Studio subscription for accessing resources within the subscriptions.

3. Implement Cost-Saving Habits in your Team

You need to be aware of whether your spending in Azure is warranted. It’s not always a bad thing when you find that your costs are increasing, it could mean that your organization is growing! What you don’t want is costs increasing as a result of resources not being utilised properly.

Cost optimisation works best when everyone is on the same wavelength.

There are limitations to trying to stay on top of your costs all by yourself; you can only save so much on your own. It’s vital that you work together with your team to proactively monitor and manage costs in a way that works for everyone.

Firstly, always tag ALL of your resources.

You should have an Azure resource tagging convention in place, and if you don’t, creating and enforcing one needs to be your biggest priority. This is one of those things that’s definitely easiest when you’re just building your Azure environment and hardest in later stages when you’ve already got numerous deployed resources.

The importance of tagging increases as your business grows and your cloud becomes more complex. Tags can be created for any purpose, but don’t just create arbitrary tags for the sake of it. They need to be relevant to how you and your team understand your cloud environment. There should also be a pre-determined list of standards for naming and assigning tags, to make sure you’re getting the most out of it.

You don’t want one person in your team labelling tags with “IT” and another with “informationTechnology” as it’ll make it much harder to search for information and data. Having a tagging convention set earlier, with everyone on your team being well versed with it, can prevent these problems from arising in the future. You can also refresh your team on it occasionally, especially as you welcome new people to your company.

One particular tag that’s important for cost management is “owner”. Say you one day notice a significant spike in costs for a resource. The “owner” tag allows you to see the owner of that resource, so you can get to the bottom of what’s going on and how it can be amended. You can also see which developers are owners of the most cost-heavy resources, which can give you an idea of which projects are on track with the budget and whether there are points of inefficiency in your team.

As mentioned, ACM and CloudClarity can let you view and report spending sorted by tags. It’s vital that you learn to easily navigate through different views and examine more carefully the way your resources are being used, and you can’t do this without having proper tags in place.

Azure Regions

Microsoft’s Azure data centres are available to end-users based on region, with there currently being regions in 140 countries. But, these regions are not built identically.

Some have different prices for the same service so, by deploying certain resources in cheaper regions, you can save a good chunk on your cloud bill. But in some instances, to get the best speed and security, you’ll need to use the nearest regions that may not necessarily have a low cost. It’s important to research and think about whether you can move your work to a different region.

Similar to tagging, it’s best to have procedures in place for how you’d prefer your team to make decisions on employing Azure services to various Azure regions.

Evaluate Resource Options

Your team and yourself should get into the habit early of considering ALL possible resource options prior to adding new workloads, similar to how you should consider regions to implement a new VM to. You should think about whether you need multiples of a certain type of Azure service, such as another database. You may find that your current databases aren’t actually being used to their full potential and getting a new one would simply be another unnecessary expense.

Thinking about your resource options also involves looking at other types of Azure resources that can have similar uses. Shopping around is great when you’re trying to comply with your budget. Just note that you may need to implement it differently, or even make adjustments to parts of your current strategy to take into account the differences in this new piece of tech.

You and your team need to consider all options and think these decisions through before you settle on an option. With Microsoft also regularly updating current tools, resources and services, as well as releasing new ones, it’s essential to stay on top of the latest Azure news. It could potentially be something that can help your company build a more efficient, secure and cost-effective cloud environment.

For more information on how CloudClarity can help optimise the costs of your Azure in a fast and easy way, head over to our website https://portal.cloudclarity.app/.