How to Optimize Your Cloud Investment with Azure Cost Management

Azure Cost Optimization

Azure Cost Optimization

This is one of the sections covered under AZ-900 Azure fundamentals exam which is most often looked upon when candidates majorly concentrate on technical topics.

This article details about Azure cost optimization and management along with its uses. In order to understand that we need to know what some are most commonly used Azure offer types, and which might best suit your business needs.

Before purchasing, one must understand and assess the following:

  • The offer type that might best suit the business requirements
  • The services and resources that you might need to deploy and use
  • Estimation of cost when you deploy and use them

Let us take a look at some commonly used offer types: 

  • Free Trial:
    • One can sign up for Azure free trial and get a $200 credit in local billing currency for first 30 days from date of subscription creation to explore various resources and get a flavour of using Azure environment.
    • 12 months of selective free services
    • 25+ services that are always free of cost.
  • Pay-As-You-Go:
    • As the name suggests, one pays for the services that they use
    • There is no prior commitments required.
    • This type of subscription can be cancelled anytime when required without any troubled of having commitments
  • Enterprise Agreement:
    • Unlike PayAs-You-Go subscription, this offer type require a up-front commitment or monetary commitment
    • This provides a reduced discount when compared to payAs-you-go prices as there is a pre-commitment
  • Azure in CSP:
    • CSP (Cloud Service Provider) are partners who act as a first point of contact for the end customers when the customers try to purchase Azure for their business.
    • CSP Partners purchase the services as bundle and resell them in discounted prices to customers

Optimizing cloud investments with cost management:

Azure cost management helps one to understand, analyze and plan to maximize the cloud investments by reducing spends on cloud investments. In a business it is always important to reduce the spending amount and leverage the maximum from purchases and that’s what is azure aims for.

Cost Estimation:

As a first step, before deploying and cloud services it is necessary to understand the business needs of the organization and determine the costs of the services that one will need to need those business requirements. This cost assessment will be necessary to forecast the spends and then help to create an estimate and budgets based on the initial estimation. This can also be used to compare with the actual spendings and analyse them for future uses. 

Azure Cost Analysis:

Azure Cost Analysis helps to analyse the business spends in a in-depth way by reducing it in a granular fashion by utilizing the cost analysis properties. The following pointers when being answered in a consistent time frame will help in being aware of the spends and helps to be up to date and cost conscious when making decisions for future purchases.

  • Cost Estimation for present month:
    • The amount needed to match the needs; will it be under the budget created for this needs?
  • Anomalies in these estimates:
    • Keeping track of the trends and making sure if the estimate and actual spend stay with in the range
  • Reconciliation od invoices:
    • Keeping a track of latest months spends and making seeing if it is more than the previous month spends. Analysing the reason behind that in case of the spends being more than previous month.
  • Chargeback:
    • Once the spends are clear analysing how this can be managed and be broken down for the business.

Below are the tools and services that help with Azure cost management:

  • Azure Pricing Calculator
  • Azure Advisor
  • Azure budgets
  • Azure Migrate

Azure Pricing calculator:

The main purpose of having this tool is to create cost estimations by making use of different combinations of a service belonging to different sku types, sizes and analysing the best suit for the business. This helps with a clear idea about the spends that might be incurred based on business needs and helps to cost the best suited one.

Azure Advisor:

Azure advisor is a Microsoft Azure service that helps to provide personalized recommendations depending on one’s azure configuration. This is a free service provided. This service provides recommendations on cost, security, reliability, operational excellence, and performance. By continuously monitoring for these personalized recommendations one can save significant spends and enhance security and performance as well.

One of the examples is when we have a virtual machine run continuously azure advisor identifies it if there is a low utilization from CPU it recommends to either shut down or resize the virtual machine based on the cost estimation. These recommendations can be adjusted and customized to specific time frame ranging from utilization from one week to months.


When we have a cost estimate is identified and analysed the spending patterns, it is necessary for identifying the limits. Azure budget provides the ability to configure cost and use-based budget with a personalized threshold and alerts. Once budgets are created ensure it is being properly monitored on regular basis and utilize it to analyse spends and optimize as and when needed.

Azure Migrate:

For running a workload in azure, one needs to have a cost estimation and require accounting all the services and resources that is necessary to run the workload. To gather those details and information creating an inventory of assets including virtual machines, servers, databases, and storage. Azure Migrate can be used to collect this information.

Azure Migrate identifies and assess the on-premises environment to provide an inventory. This helps to provide a complete image of dependencies over all the resources to create a map for estimation.

Also Read: 5 Benefits of Becoming Microsoft Azure Fundamentals Certified

Cost Management Best Practises:

The following are some of the best practices helps for operational cost management in Azure.

Right Size Provisioned SKUs: continuous monitoring of resources and its utilization and having right size of resource provisioned to avoid additional spends for the resource.

Auto-Shutdown: This also involves continuous monitoring and enabling shutting down of all non- production resources to avoid additional unnecessary spends.

Decommission: Whenever a resource is not utilized for a continuous period of time have it checked and deprovision it. This will save significant amount of cloud spend over resources.

Clean up orphaned disks: Whenever we delete any resource ensure all the associated storage or disks with the deleted resources are properly deleted as well.

Autoscale parameters: Whenever there is a sudden increase in workload instead of deploying resources manually utilize auto scale option wherever that can be used. This will help in optimizing the operational spends by automatically scaling up and down based on traffic without our intervention.


As much as we all started using cloud services it is also equally important to understand what we are deploying and how does the billing or charges work for the resource. Being aware of how much we spend on a cloud services is necessary in order to have a better infrastructure for the business and have maximum utilization of whatever infrastructure is designed by improving the performance to its best.

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