Optimizing Azure Costs

Azure offers a host of services that can help organizations efficiently optimize the many aspects of their operations. However, the range of services in the Azure ecosystem entails high costs that an organization with limited resources might not be able to afford.

For organizations that are using or looking to use Azure cloud services, it is important have Azure cost optimization to help them manage and reduce the overall costs associated with using these services. It essentially provides the right balance between performance and cost, ensuring that users get the most out of their Azure investment without the excessive costs by effectively managing resources, taking advantage of cost-saving features, and employing strategic practices to keep costs at bay. It also enhances operational efficiency, improves resource allocation, and ensures compliance not only with internal policies and standards but also with relevant industry standards and regulations.

Cost-Effective Azure Pricing Models to Consider

The basic Azure pricing model is called pay-as-you-go. While it is the most flexible, it is also the most expensive. There are actually other cost-effective pricing models available where users can potentially save money, some of which are enumerated here:

Azure Reservations – This allows users to reserve Azure resources over a one- or three-year term, in exchange for a significant discount on the regular pay-as-you-go rates. While this model requires a larger upfront investment, it can provide up to 72% savings compared to pay-as-you-go pricing. They also provide price predictability, where costs are fixed for the term of the reservation. This model is best for predictable, steady-state workloads that will run continuously over the term of the reservation

Azure Spot Virtual Machines (Spot VMs) – This is an auction-based pricing model where users can bid on unused Azure capacity. Spot VMs offer significant discounts compared to pay-as-you-go pricing with a caveat that Azure can reclaim spot VMs at any time if the capacity is needed for other customers. This model is best for workloads that are interruptible and can tolerate occasional downtime..

Azure Hybrid Benefit – This is a licensing model that allows users to use their existing on-premises Windows Server and SQL Server licenses with Azure, providing huge savings as it would cost about 40% more for  Azure Virtual Machines and up to 55% more for  Azure SQL Database.

Best Practices for Azure Cost Optimization

Beyond selecting the most appropriate pricing model, users can also save on their Azure costs by following some best practices for Azure cost optimization:

1. Tag Azure resources

Tags are key-value pairs that can be assigned to Azure resources, helping users categorize resources based on different criteria such as department or project, ultimately helping them identify underutilized or unnecessary resources so they can either be utilized to their full potential or be deleted entirely to save resources.

2. Set up VM autoscaling

Virtual machines (VMs) are among the most commonly used resources in Azure, and their costs can quickly add up if not managed properly. VM autoscaling allows users to automatically adjust the usage of VMs in response to changes in demand. This means you can scale up during peak demand periods to maintain performance, and scale down during off-peak periods to save costs.

3. Make use of Azure Cost Management

The Azure Cost Management  tool helps identify cost trends, detect anomalies, and take timely action on unintentional cost spikes. The tool provides detailed cost analysis and budgeting capabilities, as well as set budget limits and receive alerts when the Azure spending exceeds the budget.

4. Use Azure Spot Virtual Machines (Spot VMs)

Azure Spot VMs can help users save costs by utilizing unused Azure capacity at a significant discount. This makes them a great option for cost optimization, especially for non-critical or flexible workloads. They can be interrupted at short notice, so they are suitable for workloads that have flexible start and end times, or that can tolerate interruptions. And with advanced automation, they can work as well for mission-critical workloads.

Taking steps to reduce and control costs related to Azure or other cloud infrastructures requires a great deal of continuous effort and diligence. Having the right technology partners who can provide help or advice in optimizing its Azure costs can help organizations make the right strategic choices in deriving as much value with their Azure systems without dealing a blow on their resources.