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Organizing and Managing Azure Costs at Scale

6 min read

Last updated on May 17th, 2023 at 1:40pm

Cloud computing has transformed many businesses with its unprecedented flexibility and scalability. As more organizations put the cloud at the heart of their operations, they often find a growing, vital need to manage cloud costs. This FinOps approach ensures organizations get the most value for their money and costs don’t spiral out of control — but it can be daunting.

Microsoft’s cloud computing platform, Azure, offers so many helpful services that costs can climb quickly. Managing these costs demands careful planning, tracking, and optimization.

You can optimize Azure cost management with the right tools to reduce wasteful spending. We’ll explore best practices for managing Azure costs at scale and take a closer look at Kion’s solution for cloud cost management.

Getting Started with Azure Cloud Cost Management

Azure platform services are expansive, ranging from computing and networking to databases, storage, analytics, and artificial intelligence (AI). Businesses often struggle to identify which Azure services they need when facing many options. As a result, you might overspend without realizing it.

Similarly, the complex structure of Azure platform services makes it challenging to compare costs and optimize resource use. Azure’s pricing model varies depending on usage, region, and features. Organizations may also deploy multiple virtual machines on Azure, each with its own resource configurations, making it challenging to compare costs and optimize resource usage.

Running different types of workloads on Azure also impacts cost. Running larger virtual machines or machines with more powerful CPUs is generally more costly than running smaller, less powerful setups. Premium networking or storage features are likewise more expensive than standard features.

To avoid overprovisioning and the massive bill that comes with it, you must take a FinOps approach, designing cloud architecture with cost efficiency in mind. A granular system of tracking and tagging resources helps accomplish this goal. Consistently tagging resources becomes a powerful tool to understand cloud usage patterns better and identify areas for optimization — one of many in your toolbox.

Best Practices for Azure Cloud Cost Management

Azure’s tools help you manage cloud costs, but they work best when you establish cost optimization best practices in your organization. Let’s explore some best practices for managing your Azure cloud costs.

Implement a Tagging Strategy

Tagging assigns metadata to help identify, organize, and track cloud resources. In Azure, tags are key-value pairs you can link to resources such as virtual machines, storage accounts, or network interfaces.

Once in place, these tags categorize resources based on attributes such as department, project, or environment — making it easier to identify and track resources across multiple services. You can also use tags to set up cost centers, enabling you to monitor costs across different departments or teams.

Tagging resources optimizes Azure usage by identifying underused resources. For example, you can use a tag to track the last time someone accessed or used a resource. Suppose a tag is associated with a resource nobody has used for a while. In that case, you can review that resource's analytics to decide whether to resize or decommission it to save money.

Consistently tagging resources helps your organization gain a better view of usage patterns and make better-informed decisions about resource allocation.

Leverage Automation and Optimization Tools in Your Favor

Azure cloud automation and optimization tools help monitor usage patterns, enforce policies, and identify opportunities for optimization.

Analyzing patterns is vital for cloud cost optimization. Azure Advisor draws on your data to recommend cost optimization, security, performance, and availability tactics. Notably, Azure Advisor helps identify overprovisioned resources and underused virtual machines. Its recommendations can include rightsizing underused virtual machines, for instance, or adopting a more cost-effective storage tier.

Azure Policy also helps organizations comply with cost management policies. The tool defines and enforces rules for resource compliance, tagging, and usage. For example, Azure Policy can enforce a rule that all virtual machines must be off during non-business hours or that departments must tag all resources with their name.

You might also save cloud costs through Azure Reservations, which lets organizations pre-purchase Azure resources at a discount. You can lock in lower prices for resources like virtual machines or storage by committing to a minimum usage level.

Regularly Monitor and Review Your Costs

Regularly monitoring and reviewing cloud costs helps increase cost efficiency. Azure Cost Management + Billing tracks spending and usage trends, sets budgets, and alerts you to unexpected cost increases. Like Azure Advisor, Azure Cost Management + Billing also recommends cloud cost optimization advice, such as purchasing reservations for frequently-used resources.

For instance, you can use Azure Cost Management + Billing to regularly review usage patterns and optimization recommendations — two key ways to stay within budget and avoid overspending.

Managing Azure Cloud Costs with Kion

While Azure’s built-in tools can be helpful, Kion’s cloud cost management offers more robust ways to manage Azure cloud costs. For instance, Kion’s financial management features include built-in checks to identify over-provisioned and unused resources so that you can rightsize or decommission them. You can also use Kion to allocate and track spending, identify savings opportunities, and enforce budgets.

Kion enables complete visibility of cloud spending across all your Azure subscriptions. You can automatically trigger actions that notify, pause, or stop spending when your resources reach a budget limit. Kion also supports a variety of identity providers, including Azure Active Directory, enabling your team to authenticate and access all your Azure subscriptions and Kion itself using each person’s existing credentials.

We’ve already established that built-in checks to identify over-provisioned and unused resources are vital to saving costs. Kion automates this process, further saving time and reducing the chance of human error.

For instance, suppose an organization uses Azure Spot Virtual Machines with many over-provisioned instances. Kion identifies these instances and recommends rightsizing or decommissioning them, reducing spending. Kion can also enforce policies that prevent overspending, for example, by automatically pausing or stopping resources when they reach a budget limit.

Resource consistency is another powerful Kion feature. Kion’s software automatically applies Azure Resource Manager (ARM) templates through inheritable cloud rules. These templates set up secure infrastructure like Azure Virtual Networks (VNets), configure logging, and ensure your team members only use approved virtual machine images.

Kion also makes it easier to move applications from development to production. The platform integrates with CI/CD offerings and supports multiple infrastructure-as-code (IaC) languages.

Finally, Kion’s tight integration with Microsoft Azure gives you a single interface to view your entire Azure cloud.

Scale Down Cloud Costs

Managing cloud costs has become increasingly challenging — but it doesn’t have to be.

To manage cloud costs efficiently on Azure, you first need a clear understanding of your objectives. Then, implement FinOps best practices: a tagging strategy, automation and optimization tools, and persistent cost monitoring.

Kion's solution offers comprehensive cloud cost management, enabling your organization to control cloud costs through budget enforcement and savings opportunities. Learn more about how Kion helps you manage Azure costs at scale.

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