Cheat Sheet for Azure cost management!
They say that one of the benefits of the cloud is the cost. This is not always the case, for
Start low and scale-up later
You may want to buy a larger virtual machine then you need at the moment because of the time and money it takes to scale-up. This is the case when you’re hosting your Virtual Machines in a datacentre but with the public cloud, you will not have this issue. Provision the Virtual Machine size that you need at the moment and when you need more performance you can scale the Virtual Machine up within minutes.
It’s a lease? Azure Reserved Instances
On the Azure Platform, there are 3* different ways of pricing models. The most use pricing model is the Pay-As-You-Go (PAYG) model. As the name already stated, you will pay for what you will use. If you need more resources next month the bill will rise but if you need fewer resources your bill will shrink.
Azure also provides Reserved Instances (RI). If you have some resources running that will be needed for the coming years you can get a Reserved Instance, this means that you will reserve the resources for 1 or 3 year(s).
| Resource Type | Years of RI | 1 Year | 3 Year |
| Virtual Machine | 1 or 3 Years | 16% – 35% | 43% – 68%** |
| Azure SQL Data Warehouse | 1 or 3 Years | ~28% | ~60% |
| SUSE Linux | 1 or 3 Years | ~54% | ~59% |
| SQL Database | 1 or 3 Years | ~26% | ~49% |
| Azure Cosmos DB | 1 or 3 Years | 3% – 26% | 15% – 43% |
| Azure Red Hat OpenShift | 1 Year | ~31% | N/A |
| Azure VMWare Solution by cloudSimple | 1 or 3 Years | ~20% | ~43% |
Some “nice” to knows regarding Reserved Instances:
– The discount will apply to different sizes in the same Family Series, you need to enable this option!
– You will also pay if the Virtual Machine is deallocated.
Do you want to know more about Reserved Instances, click here.
Explore cost by Region
The cost of Azure resources also depends on the region. For example, the US region is on average 10% cheaper than Europe. If the region of the Azure resources is not that important, the latency is acceptable or for Dev/Test environments you could take a look at a different region.
To give a good overview of the pricing difference I use the following website: https://azureprice.net/Region.
Setup Budget & Alerts
Microsoft gives you the possibility to create budgets on Management Groups, Subscriptions, and Resource Groups. To be notified if a specific percentage of the budget is exceeded.
For more information regarding Budgets & Alerts, Click here.
Hold the end user or the department accountable
One of the ‘easiest’ actions that can be done to reduce and manage your cost is to make someone accountable for the cost. At a variety of different customers, I’ve experienced that IT people and Developers just create resources without looking at the cost to run the resources.
The best way to fix this issue is to make someone accountable for the cost, for example, an Product Owner, Lead Architect or a Lead Developer. With the feature Azure Policy, you can force the user to use Tags on Azure Resources and you can later filter on this tag to see all the resources and the cost of all these resources.
I’ve created a script that automatically assigns a Creation Date and a Creation User to the resource. If you’re interested you can send a mail to info@cloudculture.nl.
Take a look at Azure Advisors
I know, it sounds that simple! And it is that simple, but sometimes there are some good recommendations regarding cost.
As a default setting the Azure Advisor will check for every Virtual Machine within your environment and it will look for a Virtual Machine with a utilization lower than 5%. This default value of 5% can be changed to 10%, 15% or 20%, this can be done within the Azure Advisors dashboard.
Use your old licenses
The Windows license is included in the Pay-As-You-Go pricing of Microsoft. Is your company moving Virtual Machines from On-Premises to Azure and are there already existing Windows licenses? You can reuse your existing licenses and you can take them with you to Azure. The Azure Hybrid Benefit plan can be used on Virtual Machines and also SQL Managed Server.
What do you save with Azure Hybrid Benefits? At this link, you can calculate your savings.
Auto startup and shutdown
If you got a lot of Virtual Machines that are not needed in the night or can share the load over different Virtual Machines you could deallocate Virtual Machines.
There is a service called Azure Automation that can shut down or start up your Virtual Machines on a schedule. To set up a Runbook you don’t need a lot of knowledge regarding Azure or Automation because there is a load of scripts that you can use directly.
To learn more about Azure Automation, Click here!
Little reminder:
It is ongoing progress to keep your cloud environment as cheap as possible. I recommended blocking some of your time once a month to take a look at all of the resources within your environment.
Do you have any other tips or tricks? Please let me know!
*= Not included the different subscription models.
**= The savings depends on the Virtual Machine type. The LS Series Virtual Machines has an estimated 9% savings.