Azure Cost Management: monitor your cloud usage and save costs

A move from on-premise to the Cloud brings cost benefits for most organizations. In doing so, however, you must tailor the cloud environment to your organization’s needs. And that you manage and budget for ongoing cloud costs to avoid unexpected expenses.

But how do you do it, and what tools can help you do it? This article will teach you the principles of sound Cloud Cost Management in 2023.

Published: 01 January 2022

Why Cloud Cost Management?

As your organization moves toward an Infrastructure, Platform, or Software-as-a-Service environment, managing and budgeting cloud costs become increasingly important.

Cost Management in the Cloud has not yet crystallized, and many an organization is struggling to manage their costs properly. Public clouds such as Microsoft Azure generate extensive Excel lists that are sometimes difficult to understand.

Several Cost Management tools claim to be the holy grail in Cloud Cost Management. But how do you see the forest for the trees, how can you use these tools optimally, and how will your budget and reduce your costs?

It may be that you are currently initiating a move to the Cloud. But perhaps your organization already works (partly) in the Cloud. In practice, we encounter the following situations that give rise to the need to improve Cloud Cost Management:

  • Developers want to deploy a new resource to an environment because the service must perform well. With this, there is a risk that they may turn on a service that is too demanding
  • For testing new features, you set up a Dev/Test environment in Azure. No auto shutdown is configured, so you find out that the machine is still running unnecessarily after some time.
  • Your organization has numerous resources running that are attributable to various business units, solutions, and disciplines. However, no one knows who is responsible for which resources and which are still operational. These unused and untapped resources result in unnecessarily high costs each month.

Sound familiar? Then there's every reason to look at your Cloud Cost Management to lower your monthly bill. We start at the beginning.

1. Cloud strategy as the foundation

First, you determine the cloud strategy based on your organization's KPIs. From there, you develop a cloud migration plan. In it, you describe the activities, roles, and responsibilities and determine the resources needed, among other things.

If your organization has already migrated to the Cloud, but no cloud strategy is yet available as a starting point and reference, it is advisable to go back to the drawing board and follow the steps for creating a cloud strategy.

Azure Price Calculator for monthly cloud costs

You can use the Azure Price Calculator to estimate your monthly cloud costs. In it, you indicate, based on your cloud strategy, which resources you want to use. You will immediately see an overview of the expected costs.

It is essential to know the products and services you want to use because if you choose the wrong options (such as location, storage space, etc.), the costs are not realistic.

Have no idea how to set up such a cloud migration plan? Or how to create an Azure Design and calculate your Azure costs? Then it is best to engage with a Managed Service Partner on Azure. This is similar to choosing a good accountant; you pay for it, but in the end, it pays off significantly more.

2. Create Azure budgets

No doubt your finance department will be happy about it. They can easily book the costs to the correct cost center. It also gives Management and IT management the ability to reduce cloud costs (more) easily. This visibility is necessary to analyze spending patterns and tighten budgets.

Manage Azure costs for customers

When you deploy Azure for your customers - typical for many software companies - you can take it one step further. For example, you can determine your Azure costs per customer. This creates more insight but is also interesting if you want to pass on hosting costs.

If the customer needs to access the Azure portal, then it is best to create a separate subscription for each customer. This makes it easy for your customers to access their resources, you receive one invoice per customer, and you can also avoid making mistakes in allocating your resources.

Alternatively, you can work with Azure tags, which you assign to resources (groups). Then, based on a tag, within Azure Cost Management, you can accurately see the current spend on a specific Azure tag.

3. Saving costs in Azure

By creating insight into your budgets, analyzing this data allows you to identify spending patterns and determine bottlenecks. It is important to structurally compare the costs against the established budget to determine if you are still on track.

You can link alerts to the budgets you set in Azure. For example, you get a notification when a particular resource is at risk of exceeding the budget. You can also configure automatic triggers. For example, you can have a VM automatically shut down and scale down after a certain amount of time. Useful if you or your development team sometimes forget to turn off the Dev/Test environment.

In some cases, it is helpful to configure which resources development or operations may deploy in advance. This prevents the most expensive workloads from accidentally turning on, and you receive an unexpectedly high bill. Another way to avoid this is to set up a landing zone.

We'd like to help you make sense of your costs. With our Azure Cost Scan, you'll receive practical tips to help you cut costs. Want more information? Click on the button below.

Azure Cost Scan Button


Best Azure Cost Management Tools

With few resources, you can compare your cloud usage (Azure Detailed Usage) against the cost of your billing (Azure invoice). Still, this is not a straightforward method if your environment consists of numerous resources. To make Cost Management in Azure easier, Microsoft introduced Azure Cost Management with the arrival of the Azure Plan.

Azure Cost Management

With Azure Cost Management, you can analyze past cloud usage and spending and predict future spending. You can view costs in a daily, monthly, or annual trend to identify trends and anomalies and find opportunities for optimization and savings.

Intercept Customer Portal

For the MSP's end customer, we developed a Customer Portal, which is closely related to the management portal. The end customer has a complete overview of all the services and products it purchases from the MSP in the Customer Portal. This ranges from an overview of their SLA (service level agreement) to scaling up and down Microsoft licenses. As an additional example, recommendations from Azure are also displayed here so that the end customer can implement them directly from the Customer Portal. This platform provides a complete overview of everything the customer buys in terms of services and products from the MSP. Intercept's customers use the portal.

Additional tips for cost savings in the Cloud

Now that you know who is incurring what costs in your organization, you can get to work on optimizing your cloud costs. Below we give you a few more tips to save on your Azure costs:

  • Identify unused resources and deploy them. You can also easily benefit by resetting underutilized resources to a lower resource, whether automated or not. You'd be surprised how many organizations overpay for unused resources.
  • With Azure Reservations, you make an upfront commitment to purchase many workloads. Microsoft indicates that you can save up to 80 percent for the same resources. In practice, we see that this leads to more than 50% savings for our customers.
  • Within CSP, you can use Software Subscriptions that allow you to commit to Windows Server. This can result in discounts of up to 70%.
  • Use the Microsoft CSP instead of Microsoft's direct model (credit card). This will quickly save you 5% or more on your monthly bill. Check out the different purchase models from Microsoft.

    BONUS TIP: Want to make sure your costs are set up correctly 'and how you can save money? Then please request our Azure Cost Scan

Deep dive into your Cloud Cost Management

Would you like to know more about managing and budgeting your cloud costs? Do you have specific questions about Cloud Cost Management within your organization? In our (remote) Deep Dive Workshop Cost Management, we'll show you step-by-step how you can understand how your cloud costs are structured and how you can save on your monthly Azure bill.

Want to know more about our Customer Portal and what it can do for your organization? Do not hesitate to contact us. One of our experts will be happy to tell you more about it!

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