What are the best practices for optimizing cost in Azure?

Question

Hello everyone,

I've been using Azure for a while now, and while it offers fantastic cloud service, I've noticed that costs can quickly add up. I'm keen to optimize my spending on Azure while still enjoying the benefits of the platform.

So, I'd like to ask the community for some guidance. What are the best practices for optimizing cost in Azure?

I've heard about tools like Azure Cost Management and Azure Advisor, but I'm not sure how to make the most of them. What are some strategies or tips that you've found effective in controlling Azure expenses?

Here are a few specific questions I have in mind:

1. How can I set up budget alerts effectively to avoid unexpected costs?
2. Are there any recommendations for right-sizing my virtual machines and other resources?
3. What are some common cost optimization pitfalls to watch out for?

Additionally, if you have any real-world experiences or success stories in reducing Azure costs, please share them! I believe that learning from each other's experiences can be incredibly valuable.

Thanks in advance for your insights and advice!

Julie

Answer 1

Hello Juliemoore199,

Thank you for posting in Microsoft Community forum.

From the description above, I understand your question is related to optimize cost in Azure.

Since there are no engineers dedicated to Azure/ Cloud in this forum. in order to be able to get a quick and effective handling of your issue, I recommend that you repost your question in the Q&A forum, where there will be a dedicated engineer to give you a professional and effective reply.

Here is the link for Q&A forum.
Questions - Microsoft Q&A

Click the "Ask a Question" button in the upper right corner to post your question and select "Azure Cost Management" tag and "Azure Cloud Services" tag and any other Azure tag related to your products (because there are more Tags related to Azure when you type Azure key word).

If you have any question or concern, please feel free to let us know.

Best Regards,
Daisy Zhou

Answer 2

Hi Julie,

I hope my answers will help you to get answer of your questions -

How to Set Up Budget Alerts Effectively to Avoid Unexpected Costs

• Access Azure Cost Management: Start by opening the Azure portal and navigating to Cost Management + Billing.
• Create a Budget: Choose “Budgets” from the menu and then “Add”. This allows you to set a new budget based on your forecasted spend.
• Define Budget Scope: Select the scope of your budget, whether it be on a subscription level, resource group, or a specific service.
• Set Budget Amount: Input the amount you wish to allocate for the specified time period (monthly, quarterly, or annually).
• Configure Alerts: Set up alert conditions to notify you when spending reaches certain percentages of your budget (e.g., 50%, 75%, 90%). You can receive these alerts via emails or push notifications.
• Regular Updates: Regularly review and adjust your budgets based on your actual Azure consumption and changes in your project or services.

for Right-Sizing Your Virtual Machines and Other Resources

• Monitor Usage and Performance: Use Azure Monitor and Azure Advisor to track the performance and utilization statistics of your VMs and other resources.
• Analyze Recommendations: Azure Advisor provides specific recommendations for resizing based on usage patterns. These recommendations can guide you on whether to scale up (for performance) or scale down (for cost-saving).
• Consider VM Bursting: For workloads with variable performance needs, consider using burstable VM instances, which allow you to pay a base rate for CPU capacity with the ability to burst to higher capacities when needed.
• Automate Scaling: Implement Azure AutoScale to automatically increase or decrease resources based on actual real-time demand, which ensures you are only paying for what you use.

Common Cost Optimization Pitfalls

• Over-Provisioning: The most common pitfall is over-provisioning resources. Ensure that you're regularly assessing resource usage and downsizing or shutting down resources that are consistently underutilized.
• Ignoring Inactive Resources: Often, resources are left running even when they're not in use (e.g., during off-hours or development environments over the weekend). Implementing automated shutdowns or scaling down during these periods can result in substantial savings.
• Not Exploring Cheaper Alternatives: Always look for less expensive resource options that meet your requirements, such as changing the VM types, using reserved instances, or switching to managed services which can be more cost-effective than maintaining individual VMs.
• Lack of Governance: Without proper governance, individual teams may spin up resources without centralized visibility or control, leading to unexpected costs. Implementing policies and permissions to control resource creation and scaling can mitigate this issue.
• Forgetting to Delete Orphaned Resources: After decommissioning services or applications, related resources like unattached disk storage or unused network components might still incur costs. Regularly review and clean up these orphaned resources.

Thanks

Sophia

Answer 3

Optimizing costs in Azure is a smart move, and there are several strategies you can use to get the most out of the platform without overspending. Here are some best practices that might help:

1. Budget Alerts: Setting up budget alerts in Azure Cost Management is a great first step. You can create budgets for your entire subscription or specific resource groups, and set thresholds to receive notifications when your spending approaches or exceeds your budget. This helps in catching unexpected costs before they get out of hand.
2. Right-Sizing Resources: Regularly review your virtual machines and other resources to ensure they're appropriately sized for your workloads. Azure Advisor provides recommendations for resizing or shutting down underutilized VMs, which can lead to significant savings. You can also take advantage of Azure's Reserved Instances for long-term workloads, which can offer substantial discounts compared to pay-as-you-go pricing.
3. Auto-Shutdown and Auto-Scaling: Implementing auto-shutdown for non-essential VMs during off-hours and auto-scaling for dynamic workloads can prevent unnecessary resource consumption. This is particularly useful for development or testing environments that don't need to run 24/7.
4. Optimize Storage Costs: Make sure you're using the right type of storage for your data. For example, move infrequently accessed data to Azure Blob Storage's cool or archive tiers to reduce costs. Additionally, regularly review and delete unattached or unused disks, which can sometimes be overlooked.
5. Avoiding Common Pitfalls: One common pitfall is over-provisioning resources, especially in the early stages of deployment. It’s essential to continuously monitor and adjust your resource allocation based on actual usage patterns rather than initial estimates. Another is neglecting to turn off resources that aren’t in use, such as VMs or databases left running over weekends or holidays.
6. Leveraging Azure Cost Management Tools: The Azure Cost Management tool is powerful for analyzing spending trends and forecasting future costs. You can drill down into specific services or resource groups to understand where your money is going and take action accordingly. Pairing this with Azure Advisor's recommendations will help you make informed decisions on where to optimize.
7. Using Third-Party Solutions: While Azure provides robust tools, third-party solutions can offer additional insights and automation capabilities. For instance, Jamcracker's Azure Cost Management can help you manage and optimize your Azure spending more efficiently by offering comprehensive cost analysis and optimization recommendations tailored to your specific environment.

By combining these strategies and tools, you can keep your Azure costs under control while still fully leveraging the platform's capabilities. Real-world experience often shows that consistent monitoring and adjustment, combined with automated tools, lead to the best results in cost optimization.