Cloud adoption with Microsoft Azure is the first step towards a reliable, scalable and low-cost IT infrastructure. However, how do you use Azure Cost Management to manage and monitor your monthly costs to get the most value from Microsoft’s best-in-class solution?
Particularly in larger organisations, with multiple teams deploying Azure resources – do you have the tools and expertise to keep a tab on your organisation’s monthly spend and analyse Azure monthly spend versus your business requirements?
The good news is that Azure has in-built cost management and billing with detailed cost analysis dashboards, budgets and cost alerts, all of which enable you to proactively optimise costs. What’s more it’s completely free.
This article will be most relevant to IT decision-makers, procurement, finance and leadership team members wanting to optimise their costs with Azure. With the rapid uptake of Azure’s trusted IT infrastructure during the pandemic, this is more relevant than ever. Organisations now need to start looking into how to manage and streamline their overall spend.
At Compete366 we are Microsoft Gold partners. If you’d like to discuss how to optimise your organisation’s monthly spend using Azure cost management and billing, then contact us for a free discussion with one of our certified Azure technical consultants.
Estimating costs for Azure resources can be a complex exercise as more platform resources are built. The usual pitfall when multiple teams work on platform deployment is to build platform resources based on their individual project requirements.
Without a proper cost management tool, underused and redundant resources go undetected, monthly costs spiral out of control and month-on-month the Azure budget can’t be forecast, leading to unnecessary overspend.
The right cost management tool enables IT managers to monitor, manage and optimise costs regularly and proactively. They can ensure efficient usage of Azure’s resources with automated tracking and notifications to identify any cost spikes from day one.
Other frequently used tools and services for managing costs are:
Although these provide an overview of the costs incurred, this is not in real time, reducing their ability to monitor and control costs. Therefore, they are more suited to post analysis and static financial reports. The Azure Cost Management and Billing suite of tools are best for near real-time cost analysis and addressing issues efficiently,
As an organisation’s use of Azure grows, it becomes more likely that resources are un-necessarily duplicated or the design becomes cost in-efficient. Azure Cost Management and Billing offers the necessary set of tools to better monitor, manage and optimise overall costs. What’s more, Azure Cost Analysis is free with Azure and all pricing data is maintained by Azure. The following services are included in Azure Cost Management and Billing:
The below features of Azure Cost Management are provided for free for Azure resources:
Cost management for external cloud environments is charged at 1% of your total monthly spend, as detailed in the Microsoft article, Azure Cost Management and Billing pricing.
Azure AD users with one of the following role-based access control (RBAC) roles can access Azure Cost Management and Billing:
Find out more in Microsoft’s article, Manage access to billing information for Azure.
To plan and control your overall Azure costs, Azure Cost Management provides three key functionalities:
There are various ways of analysing cost including:
The Microsoft article, Common cost analysis uses provides some of the common use cases for cost analysis including forecasted costs; Azure and AWS costs; new commerce license and consumption costs and many more.
View the net accumulated charges over time to understand overall expenditures for your organisation for a specific period.
Viewing costs by an Azure service to help you get a better understanding of the parts of your infrastructure that cost the most.
You can organise your costs based on various metadata values shown in your charges, for example, you could group your costs by location.
Budgets in Cost Management help you plan for and drive accountability in your organisation. They’ll help you set thresholds for expenditure and prevent budget overspending. They’ll also help you communicate with teams on spending to manage and monitor costs proactively.
The following Microsoft article, Create and manage Azure budgets explains how to create budgets with a useful online tutorial.
Cost Management works with Azure Advisor to provide cost optimisation recommendations. Among its key benefits, it provides:
The following Microsoft article, Optimise costs from recommendations provides another useful tutorial enabling you to learn more about using Advisor to optimise your costs.
For successful and effective of Azure Cost Management, the following best practises should be adopted from day one:
Properly defined naming and tagging conventions assists in finding and managing your resources efficiently. This helps Finance teams to associate cloud resource costs with individual business teams to make cost management decisions.
Further, Azure Policy enforcement will enable you to enforce compliance and standardised approaches across your entire organisation for carrying out actions such as naming conventions, tagging resources and resource locations. You can find out more in this useful tutorial: Tutorial: Create and manage policies to enforce compliance.
Cost Analysis reports can also be used for the following:
The options below can be leveraged to automate cost analysis and perform corrective actions:
Want to make sure that you’re keeping Azure costs under control your business? Contact us for a free discussion with one of our Certified Azure technical consultants.
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How to use Azure Cost Management views: https://www.youtube.com/watch?v=VRJA5bn2VH0
Azure Cost Management setup, organisation and tagging: