Cost Management in the ‘cloud age' is becoming increasingly important and more complex when you work with more employees or different cloud vendors.
Why cloud cost Management?
With your organization working towards an Infrastructure, platform or software-as-a-service environment, predicting or budgeting cloud costs is becoming increasingly important. Moreover, you don't want to be surprised by high consumer bills afterwards, which we call bill shocking. In other words, Cost Management in the ‘cloud age' is becoming increasingly important and more complex when you work with more employees or different cloud vendors.
Cost management in the cloud is a field that has not taken shape yet and many organizations have difficulty managing their costs properly. From Public Clouds such as Microsoft Azure you get endless Excel lists which are sometimes difficult to understand. As a result, there are several different cost management tools that pretend to offer the holy grail in Cloud Cost Management. But how do you keep track and how will you budget and reduce your costs? You also receive tips on how to improve your costs effectively.
Some scenarios that we encounter in the market: Better to be safe than sorry Your developers are developing a new application and they want to deploy it to a live environment. The application must perform well and with this idea they choose the heavier and more expensive machines in Azure.
Forget and forgive ... You set up a dev/test environment to test some new functionalities. There is no Auto shutdown configured and after a while you conclude that your machine is still running.
Many resources In some cases, the application has already been fully migrated to Azure. In this case the organization has several resources running that can be allocated to various business units, solutions and disciplines within the organization. Nobody knows who is responsible for which resources and which are still in use. These unused and under-utilized resources ensure that your costs are unnecessarily higher every month.
All together there will be plenty of other reasons why correctly applying Cloud Cost Management will lower your monthly recurring bill. In this article you will get the tools to make your cloud costs transparent and easier to manage.
How do you get and stay in control of your cloud spend?
Let's start with the success factors of correctly implementing your cloud cost management. You’ll undoubtedly need a suitable Cost Management Tool for this. Make a planning Whether you still have to migrate to Azure or are already using Microsoft cloud services, develop a plan for on how to keep control on your costs in Azure and how you are going to optimize these cloud costs in the future.
If you aren’t using Azure yet. If you aren’t yet using Azure determine your cloud strategy and develop a clear cloud migration plan with your costs in mind. All very nice, but what does this mean:
Determine required resources;
Set your parameters or tags on which you will assess.
You can use the Azure price calculator to estimate your monthly costs. Do you have no clue on how to set up such a cloud migration plan? In other words, how you develop an Azure Design, calculate your Azure costs and how you implement all this? In that case you may want to talk to a Managed Service partner on Azure.
On Azure If you are already using Microsoft cloud services, there is a good chance that you can save on your monthly recurring Azure bill. In many cases it is interesting to gain insight into who is responsible for which costs within your organizations, also known as creating visibility in your cloud spend. When you know what you can spend, you determine the tooling and you set budgets per business unit, products, resources or roles.
Create visibility, analyse and manage
The only way to manage your costs and save on your Azure Costs is to gain insights into who is responsible for which (cloud) costs. For many organizations that are using Microsoft Azure and do not apply a Cost management tool, billing is a large unclear Excel list. Or they can find a simple cost overview in the Azure Portal.
With few resources, you can still somewhat compare your use (Azure detailed Usage) with the costs of your invoicing (Azure invoice), but when your environment consists of numerous resources, you will quickly become less happy with your situation.
Create visibility Determine where your cloud costs are coming from and allocate your resources to the business units, products and roles within your organisations. If you use Azure for your customers, which many software companies do, you can go next level and determine your Azure Costs per customer. This is very interesting if you want to pass on the hosting costs to your customers or if you just want to know what your Azure spending is for each customer. How your organisation is organised, and its preference ultimately determines how the costs are tagged in your tooling.
A word of advice. If the customer needs to have access to the Azure portal, then it's best to create a subscriptions per customer. As a result, your customer can easily access his own resources, you receive one invoice per customer, and you can’t make any mistakes in allocating your resources as well.
No doubt your finance department will be very happy with you. In addition, management or the IT department can easily reduce cloud costs. They need this visibility to analyse spending patterns and ultimately determine budgets.
A few Cost Management tools for your consideration Fortunately, there are several Cloud Cost Management to make our lives easier:
We use Azure Costs ourselves, because it provides a clear overview of the costs incurred. You get a dashboard and you can implement tags, configure budget and alerts.
Analyse By creating visibility and analysing data you provide insights into spending patterns and bottlenecks over time. It is important that you structurally balance the costs against your budget and determine whether you are still on schedule. Tools such as Azure Costs and Cloudyn give you ways to handle this.
In the Cost Management tool “Azure Costs” you get an overview of your overall spending, Daily Burn Rate en Billing History. You can also filter on your custom made tags and easily filter on standard tags such as: Service Types, Size Categories, Region, Primary Meter, Primary Meter Unit, Resource Groups, your subscriptions and much more.
Determine budget and set alerts If you haven’t done this yet, it is important that you set budgets. You link alerts to these budgets. You can even configure automatic triggers. An example is that you have a VM automatically turned off after a certain time. This works well if your developers in some cases forget to turn off a dev/test environment. It can also be useful to pre-configure which resources development or operations may roll out. This prevents that the most expensive workloads are accidentally turned on and you receive an invoice that you don't expect.
In conclusion, tips and tricks to optimize your cloud Cost Management
Now you have the right insights in your cloud spend it is time to make some money here. If costs are important to your organization, you constantly want to optimize your cloud costs.
With the following advice you can save on your cloud costs:
Identify and disable unused resources. You can also easily make a profit by resizing your underutilized resources to a lower resource;
With Azure Reserved Instances you commit in advance that your will purchase an X amount of resources. Microsoft indicates that you can save up to 80 percent for the same resources. With our customers we see that this leads to a 50% saving;
Use the Microsoft CSP instead of the Microsoft direct model (credit card). This will quickly save you 5% or more on your monthly bill. Do you want to know more about the different purchase models?
What is Azure Cloud Governance and how do I apply it to my Environment?
Cloud technologies are relatively easy to implement. You can be up and running within minutes, but rushing at the start often leads to more work later on. That’s why it’s important for you to have a solid plan in place.