Controlling cloud spend is listed alongside security and governance as one of the biggest challenges that companies are currently facing – many companies that are over budget on cloud overspend by an average of 23%[i]. If your company has adopted Microsoft Azure as their cloud computing platform there are a suite of services, tools and features available on the platform that when utilised correctly can help you optimise cloud cost management and help to reduce costs.

Use the tools

Azure Advisor is your forever friend for tuning the Azure platform, with cost optimisation being one of its key components. Azure will constantly scan and refresh optimisation results, so don’t forget to tune thresholds to your needs. The default report will for instance only flag machines that have below 5% CPU utilisation.

https://docs.microsoft.com/en-us/azure/advisor/advisor-overview

Azure Cost Management keeps a constant watch on the Azure environment and is a great tool for identifying spend on a global scale or down to a granular level. Combined with a good resource tagging policy, cost management can enable deep insights into platform spend. It pays to keep a close watch on costs as the freedom that Azure presents also runs the danger of unexpected bills – introducing budgets and thresholds can help prevent this.

Cost Alerts are a simple way of being notified by email if costs are escalating.

https://azure.microsoft.com/en-gb/pricing/details/cost-management/

Simplify your architecture

Many of the complex on-premise architectural patterns are not needed on the Azure platform: firewall devices can be replaced with Azure Firewall or Network and Application Security groups. When migrating do not simply rebuild what you had designed in a cloud-native platform and fit your services in. Azure Firewall is typically around 50% of the cost of a firewall appliance, with NSGs and ASGs being free resources.

Utilise native components

Replacing applications with Azure native components can help to reduce ongoing IT costs, not only in the cost of the software but in ongoing operational management costs. It is worth comparing Azure products with third-party software; Azure Monitor and Application Insights platform are just two examples of inbuilt tools companies have utilised on Azure. Cost savings can vary from company to company but on average typical savings tend to be between 30% and 50% when utilising native components.

PaaS and serverless

Modernising applications to utilise PaaS and serverless models can reduce costs in two ways, Azure run cost and operational management costs. Removing the overhead of VM and platform management frees up valuable money and eliminates system management time, this time can then be spent on application improvements. We’ve helped organisations make savings of up to £80k per year by migrating from a VM-based cloud platform to an Azure PaaS platform.

Review your cloud platform and application architectures periodically. The cloud changes at a rapid pace, and keeping a close eye on Azure updates can help reduce costs by allowing you to change the architecture and components within your solution. A production database that’s only used during office hours might, for instance, benefit from being moved to Azure SQL serverless tier.

VM-based

Right-sizing

Without a doubt, the flexibility that Azure brings around VM sizing is incredible. It pays to monitor for new VM SKUs and test them with your workloads.

Don’t stick with Default

When creating a VM in Azure the default choice is a D series VM. These are good all-round machines but as such are not optimised to workloads. Azure has multiple VM types and it pays to find the right VM SKU for your workload. Benchmark your applications and test and retest via automated tooling to find the best SKU for your workloads.

https://azure.microsoft.com/en-gb/pricing/details/virtual-machines/series/

Hybrid benefits

Bringing your existing licenses or buying licenses for your VMs and can help reduce ongoing spend on the Azure platform. Utilising hybrid benefits on your Windows licensing can produce significant cost savings. We’ve helped some customers reduce spending by £100k a year through utilising hybrid benefits on their Windows licensing.

https://azure.microsoft.com/en-gb/pricing/hybrid-benefit/

Dev/test labs

Dev/test labs for non-production environments – VMs here are costed at an OS license-free level so you only pay for running costs. This includes not only the Windows OS but SQL and other Microsoft products as well.

VM storage

Go for premium – standard disks for VMs are typically a false economy:

  • Premium disk with a low spec machine often produces better results than a VM with standard disks on a higher spec machine
  • No single VM SLA
  • Slower performance
  • Beware – disk costs continue even when VMs are turned off
  • Premium disks are more expensive but from experience, it is worth it
  • You can power off a VM when not needed. Storage persists and so do the costs, but did you know you can flick managed disk storage types to Standard HDD and change back later?

Stop/start

From my experience, one of the best savings tips is turning your VMs off when they are not in use. Moving dev, test and UAT to a weekday 12-hour running time window can produce some significant cost savings. Automated runbooks make the process a simple but effective cost-saving tip. For example, VM run costs are typically reduced by 60% when a controlled 8am to 8pm weekday start/stop policy is introduced.

Reservations

Reserving capacity is a great way to save in a cloud platform. While this was formerly reserved only for VMs it’s now possible to reserve capacity across many Azure components including:

  • Storage
  • Databases
  • App services
  • Big data platforms

Reservations are typically purchased in one or three-year bundles and can now be paid for monthly rather than a one-off payment at the start of the term.

https://docs.microsoft.com/en-us/azure/cost-management-billing/reservations/save-compute-costs-reservations

Regions

Regional pricing varies greatly – the UK datacentres, for instance, come at a premium over the EU data centres. It pays to have a look at the pricing calculator for different regions and find the most cost-effective region for your needs.

Tiers

Azure has a lot of free or low-cost services however if you require advanced features, have security concerns or need a high SLA- these can become quite expensive.

A basic web app can be free – this is great for development but the same web app in production might have to be in a secure application service environment and cost thousands of pounds a month. If you are throwing more and more resource at solving performance issues, check and double the code for issues. Application Insights is a fantastic tool for tracking what is going on in your web applications.

Making the move to the cloud can help companies benefit from reduced costs from the outset. However, over time, poor cloud cost management and lack of on-going optimisation can lead to spiralling cloud costs. By utilising the tools and services offered by your cloud platform provider, like the ones mentioned above, you can effectively manage your cloud spend long term and help your company harness the power of cloud without the headache of being over budget.

To find out more about our cloud cost optimisation offering and how we can help you manage cloud cost sprawl click here.

[i] Flexera™ State of the Cloud Report 2020