Azure Cost Management: manage your spend

Recently we have been using Azure to test various resource groups running eg Static Web Apps, Kubernetes Services (AKS), Functions etc. Due to the complex nature of the cloud environment, Azure costs can quickly get spiral out of control. As costs increase, the expenses can mount way beyond your budget. It is important to optimize your cloud spending so as to not waste money. Azure App Plans will still charge you even when any applications are not running!

Cost is always a critical factor in your organization’s success in all areas including the public cloud. Microsoft Azure (like any other public cloud provider / hyper-scaler) works on the principle of utility computing. Consuming Azure services requires a shift in the mindset from CapEx (Capital Expense) model to OpEx (Operating Expense) model. Meaning, unlike traditional on-premises infrastructure (where you can pay upfront to procure hardware and supporting infrastructure, and claim the cost as a tax deduction), you don’t pay any upfront cost for consuming Azure services and you pay based on your usage on a monthly basis.

As a starting point, before you deploy any resources in Azure, it is important to estimate the costs. Azure Pricing Calculator (https://azure.microsoft.com/en-us/pricing/calculator/) and Azure TCO Calculator (https://azure.microsoft.com/en-us/pricing/tco/calculator/) are two great resources to help you with that. In Azure Pricing Calculator, you can generate your estimates with the right set of resources that you wish to provision.

You can also verify different discounts available to you to bring down your costs, like reservations and Azure Hybrid Benefit. Sometimes, the pricing for a service can vary based on the selected region and other options. Be cognizant of your requirements and choose the right pricing tier that meets your needs.

If you have an enterprise agreement or a Microsoft Customer Agreement with Microsoft, you can verify the total cost after your discount is applied as well. Likewise, you can also see the dev/test pricing to validate additional savings.

Once you have estimated your costs and provisioned your Azure resources, it is very important to keep a track of your Azure spend and optimize it regularly by minimizing wastage. Microsoft offers a feature-rich tool called Azure Cost Management and Billing for managing your Azure spend. It helps to bring visibility into your Azure spend by providing insights into where your money is spent. You can utilize tags and cost attribution features in Azure Cost Management to attribute your Azure costs to different people and departments to bring in accountability. Once you gain visibility and accountability into your azure spend, you can utilize the insights to optimize your workloads by minimizing wasteful expenses and reduce your overall spending. You can utilize options like reservations and Hybrid Benefit to bring down your overall spend. You can also refer to Azure Advisor which offers a bunch of recommendations to optimize your Azure spend.

Getting Started with Azure Cost Management: To get started with Azure Cost Management, Login into Azure Portal, then go to All Services and search for cost management.

Cost Analysis: Azure Cost Management just not let you see your historical cost data, but it also offers forecasted costs for up to 12 months.

Billing Scope: To start with Azure Cost Management, choose the right billing scope you have access to. For example – if you have access to a resource group, you can manage costs for that resource group. Likewise, if you have access to a subscription, you can manage costs for that subscription.

Views: Once you have selected the scope, Azure Cost Management offers a bunch of grouping and filtering options that you can utilize to generate different types of cost reports. There are 5 built-in views that you can use from –

Accumulated Costs lets you look at current trend of your spending. Cost by resource shows your Azure costs grouped by each resource. This view is useful to identify expensive resources. Daily Costs shows the costs on a daily basis which can be useful to identify anomalies in your spending. Costs by Service lets you compare your azure costs grouped by service type for the last 3 months. Invoice details let you view last month’s invoice data.

If the built-in views don’t provide what you need, you can always create your own views.

Time Filters: You can choose the timeframe for which you want to manage costs. There are predefined options that you can opt from like the last 7 days, last month, last 3 months, last year, etc. or you can select a custom date range.

Filters: You can filter your cost data based on common properties like meter category, subscriptions, resource groups, resources, resource types, tags, and so on.

Cost View Customization: You can customize your views to see actual or amortized costs, show/hide forecasted costs, and validate your spending against budgets. By default, it shows the actual costs which reconcile with your invoice amount. you can switch to Amortized costs to show the reservation utilization and break up of reservation costs among different resources. If there is no existing budget, you can create your own budget on Actual or Forecasted costs for any billing scope in monthly, quarterly, or yearly cycles. Please check out the quick start video included in this blog post to see how to create a new budget.

Grouping and Charting: Lastly, you can group your cost data based on common properties like meter category, resource group name, subscription, and tags. You can also generate different kinds of charts (area, line, or column) to show trends for your Azure cost data. You can also show the cost data in table format.

Tags: Azure offers a mechanism called tags through which you can group your resources into a taxonomy. Tags can be very helpful in grouping spend of related resources in Azure Cost Management. For example- you can tag all your resources with an Owner and an Application tag to which the resources belong to. Then, in Azure Cost Management, you can filter or group Azure Cost data based on the owner and/or application tags to attribute the Azure costs correctly. As a best practice, you can also enforce certain tags in your environment using Azure Policies. For more details on Azure Tagging policies, please refer to this link.

Supported Account Types: Azure cost Management supports most of the common account types like Enterprise Agreement and Microsoft Customer Agreement. Please click here to see an up-to-date list of account types supported by Azure Cost Management + billing.

Export Azure Cost Data: You can export Azure cost data into a storage account on a schedule through the export option under the configuration blade. Alternatively, Microsoft also offers Cost Management + Billing APIs which can be used to consume the Azure cost data over APIs. If you use Power BI, you can also use Power BI Connector for Azure Cost Management.

Manage AWS costs: If you have multi-cloud environments, you can use Azure Cost Management to just not manage your Azure costs, but, also, your AWS costs.

Pricing: Azure Cost Management is free to use to manage Azure costs, but, if you would like to manage your AWS spend, it comes with a price tag.

Seven ways to optimize Azure costs:

Shut down unused resources – Since the cloud works on a Pay-As-You-Go model, don’t leave any resources running in Azure that are not used. Right-size under-used resources – Don’t over-provision your resources. Start small and provision the minimum capacity that you need.

Increase the capacity when needed.

Reserve instances for consistent workloads – if you are an enterprise customer, you can save up to 72% by buying capacity upfront.

Take advantage of the Azure Hybrid Benefit– if you have licenses bought for your on-premises infrastructure, you can bring them to your cloud resources to further optimize your spending.

Configure autoscaling – Similar to right-sizing, you can auto-scale your resources when needed.

Set up budgets and allocate costs to teams and projects – Budgets help keeping a track of your Azure spend.

Choose the right Azure compute service – You can be better off by buying a single Azure SQL database instead of provisioning a full-blown Virtual Machine.

Here are some resources you can refer to for more details:

https://docs.microsoft.com/en-us/azure/cost-management-billing/cost-management-billing-overview https://docs.microsoft.com/en-us/azure/cost-management-billing/costs/understand-cost-mgt-data https://azure.microsoft.com/en-us/overview/cost-optimization/#ways-to-optimize

Management Tools to Optimize Your Cloud Spending

You might need Azure cost management tools to visualize your cloud spending better. With cost management tools, you’ll have practical insights on how costs vary for each service. Some tool options use artificial intelligence to forecast future spending for deeper visibility. You can track cloud costs and detect anomalies before they reflect on your bill by using these tools.

Azure Cost Management

Like other major cloud platforms, Azure has built-in tools to help you optimize your cloud spending. Microsoft Azure uses advanced analytics to analyze usage patterns, which leads to escalating costs. Azure Cost Management also gives recommendations to help you save costs. You can also set specific budgets; Azure notifies you whenever you exceed a configured budget. Azure users can also set notifications alerting them whenever they exhaust allocated resources. Azure offers inbuilt cost management services free for all users.

Spot by NetApp

One effective way of reducing cloud costs is using Spot resources. Spot refers to excess compute resources in the cloud. Anyone can use spot capacity for temporary and volatile workloads. Spot by NetApp can help you cut costs by as much as 89% with Elastigroup. Elastigroup automates the allocation of excess compute resources. Users can also access multiple Spot virtual machines within a single group. That way, you can right-size the ideal capacity while saving on costs. Spot also gives provides usage reports on cloud spend insights. You can implement cost management recommendations to optimize cloud spending.

CloudHealth by VMware

CloudHealth helps Azure users lower cloud bills through automation. You can create custom rules which automate how you use your cloud spend. It also provides a detailed breakdown of cloud costs against set budgets. In addition, users can easily detect anomalies using the CloudHealth dashboard. If you need the input of experts on optimizing your cloud spend, use CloudHealth reports. Subscribers can allocate chargebacks to relevant business units, which is another way of optimizing cloud spending. CloudHealth simplifies your overall financial health under a Cost Summary dashboard.

Apptio Cloudability

As cloud adoption increases, people consume more cloud services. Azure offers a good environment to grow, but with growth, costs can increase, and cost management becomes even more complex as startups grow. Apptio helps Azure users allocate the right tags for each cost center. That way, you’ll have an easy time interpreting the report. Plus, you can share billing reports with other team members so that each department understands how bills vary over time. Most importantly, Apptio offers tips on rightsizing Azure resources.

OneView Cloud Expense Management

OneView, by Nebula, is a proactive way of optimizing cloud spending. OneView has a good dashboard where you can view actionable metrics. You can forecast future costs and reduce bill shock based on these metrics. For instance, you can view all expenses, regardless of the cost centers, number of accounts, and cloud providers. So you can compare how Azure costs vary with other platforms. OneView integrates with other providers to give detailed analysis, reports, and forecasts.

Cloud Cost Management by myCloudDoctor

Cloud optimization should be a continuous process. Scalable companies need experts to audit accounts periodically. Azure has free and paid services. For this reason, shared resources make it difficult to allocate cost centers. Cloud cost management services by myCloudDoctor can help you allocate shared expenses. It’s a combination of insights from their MultiCloud Cost Management tool and their cloud engineers.

nOps Azure Cost Optimization

nOps is a leading cloud platform management provider with excellent Azure capabilities. Azure users can use nOps for various cost management operations, from tracking costs to detecting anomalies. All cost management capabilities are under one Cloud Cost-Control Dashboard. Users can optimize cloud costs based on leading standards like the Azure Well-Architected framework. For example, under the cost-optimization pillar, you can find prioritized insights and necessary cost management actions.

nOps can help you: · Get a healthy glimpse of the Azure infrastructure · Continuously implement cost-management findings · Automate Azure operations and compliance

The Bottom Line

There are several Azure cost management tools that you can use to stay ahead of your costs. Each tool has its ideal use-cases, and you can choose depending on your business needs.