6 Azure Cost Optimization Best Practices You Should Follow

6 Azure Cost Optimization Best Practices You Should Follow

With the advent of the COVID-19 pandemic, organizations shifted their entire business online, with enterprises embracing multi-cloud and hybrid cloud strategies to host their resources and capitalize on the unparalleled flexibility and scalability offered by cloud platforms.

As cloud computing usage grows at an unprecedented rate, enterprise adoption of Microsoft’s Azure Cloud Services continues to soar. Insights from Microsoft’s Fiscal Year 2021 Second Quarter Earnings Conference Call and related research reveal –

  • Microsoft Azure revenue grew 50% year-over-year in fiscal Q2, 2021, contributing to a 26% increase in Server products and cloud services revenue.
  • Commercial cloud gross margins increased to 71% in the latest quarter, up from 67% a year earlier.

However, Azure cost optimization continues to be a critical concern, especially for organizations that have recently migrated to Azure. Since Azure cloud infrastructure can be deployed on-demand, usually outside the control of a traditional IT department, managing its associated costs is different from optimizing the cost of an on-premise server. Azure cloud services infuse agility, but without a solid plan to control costs, the return on investment (ROI) can quickly spiral downwards. Therefore, leaders must focus on optimizing spends, reducing the total cost of ownership (TCO), and getting the best out of Azure.

Here are a few Azure cost optimization best practices you should follow to help you in the process.

6 Azure Cost Optimization Best Practices

Before delving deep into the best practices, let’s first understand what typically comprises Azure costs.

Simply put, Azure costs includes the amount of storage, computing, and network resources an organization provisions. In other words, you need to pay only for whatever you use. For example, a virtual machine (VM) with more storage costs more than a VM with lesser storage.

Since Azure is a cloud platform, organizations can easily scale up or down whenever needed. Azure cloud optimization means bringing the actual resource utilization in line with the optimal usage.

Organizations can maximize efficiency while managing costs by following the below best practices –

1. Identify the unused resources

A cloud services bill will include charges for all resources purchased, even though some may not currently be used. For example, the admin may not remove storage pertaining to jobs that have already been eliminated. In such an instance, costs related to unused storage can easily be reduced. Therefore, organizations must continuously monitor the cloud infrastructure to check which resources are still being used and which ones can be quickly decommissioned.

2. Rightsize the VMs

Azure offers a lot of options in terms of storage capacity and computing power of the VMs. Since it is a flexible infrastructure platform, businesses can easily assess infrastructure utilization and make necessary adjustments, depending on the day-to-day requirement. Therefore, a sure shot method to optimize Azure costs is to a) monitor the utilization and b) ensure the VM is rightsized or shut down in line with the current needs.

3. Consider B-series virtual machines

When VM cost optimization is the primary concern, organizations must consider the B-series virtual machines, also known as the burstable VMs. Microsoft designed these VMs for situations where workloads mostly demand moderate CPU utilization but will encounter occasional peaks in use. The B-series VMs have the potential to save between 15-55% cost, depending on your operating system.

4. Consolidate idle resources

A resource running at a CPU utilization level of 1-5% is considered idle. When billed at 100%, it becomes an instance of a wasteful expenditure that can be eliminated with proper monitoring. By consolidating such instances into fewer groups and leveraging on-demand scaling, organizations may optimize their Azure costs.

5. Choose the right payment option

Azure offers several payment options –

  • Pay-as-you-go: The most flexible yet the most expensive option that allows you to add infrastructure on demand
  • Reserved instances: Azure Reserved instances are suitable for long-term workloads and require an upfront commitment of 1-3 years but may offer cost savings of up to 70%
  • Spot instances: Spot instances help Azure utilize its unused physical compute capacity and result in a cost-saving of up to 90%. Since spot instances may be suspended at any time, they are suitable for workloads that aren’t time-bound

6. Shift to containers

Besides virtual machines, Azure offers containers as a computing option. Containers optimize costs by combining different tasks in fewer servers. Other benefits include a lower digital footprint, faster operability, built-in monitoring, etc.

How can Acuvate help?

As a Microsoft Gold Partner, Acuvate offers an AI-driven Azure Cost Optimization (ACO) solution that helps organizations carve out potential cost reductions of up to 30%.

Our ACO solution aims at continuously monitoring usage, identifying cost-based anomalies, and increasing predictability related to cost.

The tool leverages interactive dashboards to provide reports and recommendations and assists the IT team with the following –

  • Monitor and analyze the Azure bill, set budgets, and allocate resources to projects accordingly
  • Leverage AI algorithms for accurate forecasting and budget planning
  • Estimate potential cost savings by team and project
  • Provide AI-powered cost anomaly detection and smart notifications
  • Offer cost optimization recommendations and use intelligent robots to take action based on the suggestions

To know more about the solution, feel free to schedule a personalized consultation with our ACO experts.


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